BOJ holds 43.5% of all outstanding Japanese government debt

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.

Omkar Godbole FXStreet Contributor

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.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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