{"id":6155,"date":"2015-03-02T19:58:13","date_gmt":"2015-03-03T00:58:13","guid":{"rendered":"http:\/\/olduvai.ca\/?p=6155"},"modified":"2015-03-02T19:58:13","modified_gmt":"2015-03-03T00:58:13","slug":"japan-approaches-limit-to-bond-buying-former-boj-official-okina-warns","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=6155","title":{"rendered":"Japan Approaches Limit To Bond Buying Former BOJ Official Okina Warns"},"content":{"rendered":"<h3 class=\"title\"><a href=\"http:\/\/www.zerohedge.com\/news\/2015-03-02\/japan-approaches-limit-bond-buying-former-boj-official-okina-warns\" target=\"_blank\">Japan Approaches Limit To Bond Buying Former BOJ Official Okina Warns<\/a><\/h3>\n<p>A day after we highlighted\u00a0<a href=\"http:\/\/www.zerohedge.com\/news\/2015-03-01\/more-flash-crashes-come-shadow-banking-liquidity-collapses\">the veritable collapse<\/a>\u00a0in U.S. shadow banking liquidity (down by nearly half since 2008) occasioned by a potent one-two punch from Fed bond purchases and regulatory measures designed to stem prop trading (but which have apparently impaired market making), we get rumblings out of Japan that the BOJ might have hit the limit on how many JGBs it can purchase without breaking the market. Specifically, Yuri Okina, vice chairman at Japan Research Institute, is concerned about the exact same issue raised by the Center for Financial Stability in their report on the \u201csteep slide\u201d in market finance: namely, that the absence of liquidity created by QE will create distortions and volatility.<\/p>\n<p>From Bloomberg:<\/p>\n<blockquote>\n<div class=\"quote_start\"><em>\u201cIf additional easing is done using government bonds, it may have the considerable side-effect of impairing the functioning of the market,\u201d Okina, an economist and a former BOJ official, said on Feb. 26 in an interview in Tokyo.\u00a0<\/em><\/div>\n<p><em><strong>The BOJ\u2019s purchases have had a \u201chuge\u201d impact on the market\u2019s liquidity<\/strong>, Okina said. Buying bonds at a faster pace would make it more difficult for the BOJ to exit from its easing policy when the time comes to reduce stimulus, she said.<\/em><\/p><\/blockquote>\n<p>Clearly there\u2019s something self-evident (even tautological) about this discussion. That is, the BOJ is\u00a0<a href=\"http:\/\/www.zerohedge.com\/news\/2014-12-25\/japanese-10y-yield-drops-record-low-2s-sell-subzero-after-boj-indirectly-buys-record\">set to monetize<\/a>\u00a0all JGB gross issuance in 2015 (and may own 50% of the entire market within three short years), so yes, there are likely to be rather serious issues with market liquidity going forward.<\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Japan Approaches Limit To Bond Buying Former BOJ Official Okina Warns A day after we highlighted\u00a0the veritable collapse\u00a0in U.S. shadow banking liquidity (down by nearly half since 2008) occasioned by a potent one-two punch from Fed bond purchases and regulatory measures designed to stem prop trading (but which have apparently impaired market making), we get [&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":[57,87,88,195,1256,233,282,452,487,3883,3882],"class_list":["post-6155","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-japan","tag-bond-buying","tag-bonds","tag-debt","tag-debt-monetization","tag-ecb","tag-european-central-bank","tag-japan","tag-liquidity","tag-okina","tag-yuri"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6155","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=6155"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6155\/revisions"}],"predecessor-version":[{"id":6156,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6155\/revisions\/6156"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6155"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}