The Bank of Japan’s ongoing purchases of Japanese stocks has warped the country’s equity markets. Every day it continues will make the eventual unwinding of those holdings harder, both for the central bank and for the markets themselves.

In January 2013, the BOJ introduced a 2% price stability target in an effort to extract the country from more than a decade of stagnant or falling prices. That in itself was a rare move by a central bank. Sayuri Shirai of Japan’s Keio University explains.

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https://www.adb.org/publications/boj-exchange-traded-fund-purchases-unprecedented-monetary-easing-policy

About the author

Sayuri Shirai is a professor at Japan’s Keio University and a visiting scholar at the Asian Development Bank Institute and served on the Bank of Japan’s monetary policy board from 2011 to 2016.

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