• 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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD stabilizes above 0.7100 ahead of FOMC minutes

AUD/USD stabilizes above 0.7100 ahead of FOMC minutes

The AUD/USD pair has surpassed 0.7110 as investors are awaiting the release of the Federal Open Market Committee (FOMC) minutes on Wednesday. The pair struggled to surpass 0.7120 on Tuesday and is attempting to elevate itself above the fortnight high at 0.7127.

AUD/USD News

EUR/USD clings to monthly top above 1.0700 ahead of ECB’s Lagarde, FOMC Minutes

EUR/USD clings to monthly top above 1.0700 ahead of ECB’s Lagarde, FOMC Minutes

EUR/USD dribbles around a one-month high, after rising for the last two consecutive days to Wednesday’s Asian morning, as the US dollar selling pauses ahead of the key catalyst, as well as amid a risk-off mood. 

EUR/USD News

Gold bulls stay on top, but bears lurking at daily resistance

Gold bulls stay on top, but bears lurking at daily resistance

The gold price has been moving higher on Tuesday as the US dollar gave way to the bears yet again, sliding to a one-month low following hawkish rhetoric from the European Central Bank President Christine Lagarde.

Gold News

Can Cardano price drop lower after losing 80% since its all-time high?

Can Cardano price drop lower after losing 80% since its all-time high?

Cardano price action continues to dip lower and lower, following the broader market in a continued downtrend. Time cycles indicate relief may not come until June.

Read more

RBNZ Preview: Will they step up their tightening game? Premium

RBNZ Preview: Will they step up their tightening game?

Another double-dose rate hike is on the table for the RBNZ when it meets this Wednesday to decide on its monetary policy at 0200 GMT. The central bank’s outlook on the pace of tightening, however, will be key in determining NZD/USD’s next price direction.

Read more

Forex MAJORS

Cryptocurrencies

Signatures