BOJ's asset is as much as Japan's GDP

in trending •  8 years ago 

BOJ(Bank Of Japan) keep purchasing JGB(Japanese Goverment Bond) about 80 trillion yen annyually. BOJ held 400 trillion yen
of JGB in October 2016. Now BoJ supposed to hold JGB to the amount of 440 trillion yen. Besides, BOJ hold ETF(a half of domestic ETF), corporate bonds, REIT etc. which make 100trillion. 440 trillion +100trillion=540 trillion=nominal Japanese GDP.
BOJ's asset size to GDP is 100% and this ratio is extremely higher than that of FRB(25%) or ECB(30%). The problem is that BOJ seems more and more unbearable to support Japanese economy. BOJ recently suffers red ink due to the experiment of negative interest rate over a year. Governor Kuroda confessed last week that one percent more JGB interest rate rise will make it insolvent. BOJ's net worth is just 7 trillion yen and it is decreasing day by day. To what extent BOJ can continue to purchase JGB? sryutaro.png

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8 years ago by

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