Economics
BOJ’s Swelling Asset Pile Complicates Future Exit From Stimulus
- ‘Whale in pond’ effect grows in bond, ETF and CP markets
- Crowding out of private investors further distorts activity
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The Bank of Japan’s escalating presence in almost every corner of the nation’s financial markets threatens to further distort activity and complicate any future pulling back from stimulus.
The central bank’s growing pile of assets has now reached the equivalent of 137% of gross domestic product, according to a Bloomberg calculation based on official data. In dollar terms, the tally of securities, loans and other assets is just 8% smaller than the Federal Reserve’s even though the U.S. economy is four times bigger than Japan’s.