Did the bank of Japan's purchases of exchange-traded funds affect stock prices? A synthetic control approach

This study investigates the effect of the Bank of Japan's large-scale exchange-traded fund purchasing programme since 2013 on stock prices using a synthetic control method. We use the stock price indexes of 27 OECD countries as a control group and estimate the time-series data of the synthetic stock price index of Japan. The index in Japan increased gradually relative to the synthetic Japanese index from 2013. This result suggests that the Bank of Japan's intervention in the stock market is distorting stock prices and should be reconsidered.