The listed shares of the Japanese and Swiss central banks rose sharply on Tuesday, without any apparent underlying reason, in what traders said was a reflection of high levels of investor exuberance in markets flooded with cash.
Shares in the Bank of Japan (BOJ) and the Swiss National Bank (SNB) gained as much as 21% and 4.6% respectively, but traders struggled to pinpoint any fundamental drivers behind the surge.
Due to their peculiar ownership structure, both central banks, which set monetary policy in economies with the world's best known funding currencies, have a low free float which can exacerbate moves in their share prices.
"One could see the rise (in BOJ shares) as symbolic of how markets are driven by excess liquidity," said Takashi Nakamura, a senior strategist at Japan's Tokai Tokyo Research Institute.
"We're starting to see signs of a bubble everywhere in the stock market," he added.
BOJ shares climbed above 40,000 yen ($374), their highest since October 2018, having risen 46% over the last three sessions. The government owns more than half of the stock.
Veteran investors were reminded of the late 1980s when Japan was experiencing an asset-price bubble and BOJ shares became the target of speculative trading, rising 40-fold in four years.
SNB shares built on Monday's strong gains, recorded after it posted a net 2020 profit of 20.9 billion Swiss francs.
Traders in Zurich said retail investors were most likely driving the move but volumes remained thin.
The SNB declined to comment on its share price.
The last sharp rise in the SNB's shares was in April 2018, when they climbed from below 2,000 Swiss francs to an all-time peak of 9,760 francs in less than a year. Again, the reason why was not clear.
Voting rights in the SNB are subject to restrictions with most of its shares held by the country's cantons and regional banks.
A pullback in the Japanese yen and Swiss franc against the U.S. dollar this year also bodes well for the central banks as the value of hundreds of billions of dollars worth of overseas assets on their balance sheets rises.
($1 = 106.9100 yen)
(Reporting by Danilo Masoni in Milan, Fumiya Mizuno in Tokyo, Aaron Saldanha in Bengaluru; Additional reporting by John Revill in Zurich; Editing by Kirsten Donovan) ((Aaron.Saldanha@thomsonreuters.com; +91 80 6749 1130; Reuters Messaging: Aaron.Saldanha@email@example.com))