{"id":29452,"date":"2018-01-06T08:59:03","date_gmt":"2018-01-06T13:59:03","guid":{"rendered":"http:\/\/olduvai.ca\/?p=29452"},"modified":"2018-01-06T08:59:03","modified_gmt":"2018-01-06T13:59:03","slug":"qe-party-over-even-by-the-bank-of-japan","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=29452","title":{"rendered":"QE Party Over, even by the Bank of Japan"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2018\/01\/05\/bank-of-japan-begins-qqe-unwind-despite-its-rhetoric-qe-party-over\/\">QE Party Over, even by the Bank of Japan<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>First decline in its colossal balance sheet since 2012.<\/strong><\/p>\n<p>An amazing \u2013 or on second thought, given how central banks operate, not so amazing \u2013 thing is happening.<\/p>\n<p><strong>On one hand\u2026<\/strong><\/p>\n<p>Bank of Japan Governor Haruhiko Kuroda keeps saying that the BOJ would \u201cpatiently\u201d maintain its ultra-easy monetary policy, so too in his first speech of 2018 in Tokyo, on January 3, when he said the BOJ must continue \u201cpatiently\u201d with this monetary policy, though the economy is expanding steadily. The deflationary mindset is not disappearing easily, he said.<\/p>\n<p>On December 20, following the decision by the BOJ to keep its short-term interest-rate target at negative -0.1% and the 10-year bond yield target just above 0%, he\u2019d brushed off criticism that this prolonged easing could destabilize Japan\u2019s banking system. \u201cOur most important goal is to achieve our 2% inflation target at the earliest date possible,\u201d he <a href=\"https:\/\/www.reuters.com\/article\/us-japan-economy-boj\/boj-keeps-policy-steady-kuroda-dismisses-talk-of-early-exit-idUSKBN1EE2P5\" target=\"_blank\" rel=\"noopener\">said<\/a>.<\/p>\n<p><strong>On the other hand\u2026<\/strong><\/p>\n<p>In reality, after years of blistering asset purchases, the Bank of Japan <a href=\"http:\/\/www.boj.or.jp.\/en\/statistics\/boj\/other\/acmai\/release\/2017\/ac171231.htm\/\" target=\"_blank\" rel=\"noopener\">disclosed<\/a> today that total assets on its balance sheet actually <em>inched down<\/em> by \u00a5444 billion ($3.9 billion) from the end of November to \u00a5521.416 trillion on December 31. While small, it was the first month-end to month-end decline since the Abenomics-designed \u201cQQE\u201d kicked off in late 2012.<\/p>\n<p>Under \u201cQQE\u201d \u2013 so huge that the BOJ called it Qualitative and Quantitative Easing to distinguish it from mere \u201cQE\u201d as practiced by the Fed at the time \u2013 the BOJ has been buying Japanese Government Bonds (JGBs), corporate bonds, Japanese REITs, and equity ETFs, leading to astounding month-end to month-end surges in the balance sheet. But now the \u201cQQE Unwind\u201d has commenced. Note the trend over the past 12 months and the first dip (red):<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-38041\" src=\"https:\/\/wolfstreet.com\/wp-content\/uploads\/2018\/01\/Japan-BOJ-assets-monthly-change-yen_2017-12.png\" alt=\"\" width=\"476\" height=\"361\" \/><\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>QE Party Over, even by the Bank of Japan First decline in its colossal balance sheet since 2012. An amazing \u2013 or on second thought, given how central banks operate, not so amazing \u2013 thing is happening. On one hand\u2026 Bank of Japan Governor Haruhiko Kuroda keeps saying that the BOJ would \u201cpatiently\u201d maintain its [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[57,85,17798,124,661,8701,662,8625,4254,4255],"class_list":["post-29452","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-japan","tag-boj","tag-central-bank-balance-sheets","tag-central-banks","tag-qe","tag-qt","tag-quantitative-easing","tag-quantitative-tightening","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/29452","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=29452"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/29452\/revisions"}],"predecessor-version":[{"id":29453,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/29452\/revisions\/29453"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=29452"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=29452"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=29452"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}