- BOJ's massive government bond holdings indicate there is little room for further stimulus.
- The central bank may have a hard time weakening Yen in future.
The Bank of Japan (BOJ) now holds a staggering 43.5% of all outstanding Japanese government debt, Jeroen Blokland, Portfolio Manager for the Robeco Multi-Asset funds, Robeco ONE and Robeco Pension Return Portfolio, tweeted on Thursday.
The central bank unleashed a massive quantitative easing program in April 2013. Under the QE plan, the Bank of Japan (BoJ) vowed to buy ¥7 trillion of government bonds each month using electronically created money.
The QE program is in its sixth year. Even so, the BOJ remains miles away from its 2% inflation target.
If anything, the QE program seems to have distorted markets. Also, with BOJ owning more than 43% of government debt, there is limited scope for further monetary stimulus.
Put simply, the BOJ is going to have a tough time battling bullish pressures around the JPY during the next round of risk aversion.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD recovers toward 0.9700 as dollar loses strength
EUR/USD has gathered recovery momentum in the early American session and rose toward 0.9700. The US Dollar Index continues to retrace its daily rally after disappointing Chicago Fed National Activity Index reading, helping EUR/USD push higher.
GBP/USD climbs into positive territory near 1.0900
GBP/USD has extended its rebound and turned positive on the day near 1.0900. Speculations about the BoE preparing to deliver a statement on the pound's depreciation and the modest selling pressure surrounding the dollar fueled the pair's upside in the early American session.
Gold fails to hold above $1,640 as US yields push higher Premium
Following the selloff witnessed in the early Asian session, gold turned positive on the day near $1,650 but erased its daily gains. The benchmark 10-year US Treasury bond yield is up more than 2% on a daily basis, not allowing XAU/USD to stretch higher.
Cardano price could trap impatient investors before triggering an explosive move to $0.505
Cardano price shows a consolidation below a stable support level and has yet to reveal a directional bias. The ongoing range tightening will likely resolve as the US markets head to a fresh start this week.
Three stocks that will be in the news this week: Amazon, Nike, Micron Technology
The S&P 500 index lost 4.1% last week and left traders melancholy with another week to go in this dreadful September. The S&P 500 index is down 6.6% so far in the month that is already known for poor performance, and most seem to think the pain will continue.