(adds more detail.)
TOKYO, March 17 (Reuters) - The Bank of Japan bought 120.4 billion yen ($1.13 billion) of Japanese stock exchange traded funds (ETFs) on Tuesday, the BOJ said on its website, an increase of 20.2 billion yen from its previous buying and a daily record.
The increase came after the central bank said on Monday it would increase ETF purchases to up to 12 trillion yen per year.
It surprised many market players because Tuesday’s buying did not fit with the central bank’s unwritten but fairly consistent stance of buying ETFs mostly on days when the broader market index falls 0.5% or more in the morning.
The Topix had gained 0.37% by the midday break on Tuesday.
Market players said the Government Pension Investment Fund (GPIF) and other public pension funds could also have bought stocks to rebalance portfolios following recent sell-offs.
The Nikkei closed up just 0.06% on Tuesday while the Topix rose 2.6%.
$1 = 106.69 yen Reporting by Tomo Uetake; Editing by Catherine Evans