Has engaged on a massive asset purchase program since the 2008 Recession
Assets have eclipsed Japan's GDP in 2018
Asset purchases include both stocks and
1980s Mayekawa plan
In 1970s-80s Japan had massive export growth to the US
Better & cheaper exports to the US started to hollow out American Industry
This created huge political pressure and negotiations that Japan had to deal wit
Japans solution was to pump the Japanese Economy, thus ramping up US imports to compensate
Biggest component of plan was loose monetary policy
Drove massive bank lending Expansion: BOJ required banks to increase lending, banks told branches to increase lending, branches told loan mangers to increase lending, etc.
People down the line understood that they were creating a bubble, but did to since the order cam from up top
Results in massive asset price bubble in Japanese stocks and real estate
It has purchased (and continues to purchase) so many assets that markets are manipulated and have no price discovery
On some days no 2, 5 or 10 year government bonds publicly trade (the bank buys/owns them all)
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