According to BOJ data, assets will quadruple to 715 trillion yen …

According to BOJ data, assets will quadruple to 715 trillion yen …


Bank of Japan’s total assets increased to 714.56 trillion yen in 2020, central bank data showed Thursday, quadrupled in eight years under Governor Haruhiko Kuroda’s aggressive monetary easing policy, national economy It has grown 1.3 times the scale.

The BOJ’s balance sheet expanded to March 31 due to the large-scale purchase of assets such as Japanese government bonds as part of its super-monetary policy and the increase in financial assistance to companies that are out of the COVID-19 pandemic.

As of the end of March 2013, the BOJ’s total assets were 164 trillion yen before taking bold monetary easing measures under the Kuroda administration.

Total assets increased from 604.48 trillion yen in the previous year, exceeding Japan’s nominal gross domestic product of 535.72 trillion yen in 2020.

Despite aggressive monetary easing, the Bank of Japan has yet to reach its 2% inflation target. According to the Bank of Japan’s forecast, even if Mr. Kuroda’s term ends in April 2023, the target has not yet been achieved.

The ratio of assets to GDP is higher than the ratio of other major central banks, including the US Federal Reserve, which purchased assets to fund the banking system.

Of the BOJ’s assets, Japanese government bonds increased 9.5% year-on-year to 532.17 trillion yen, and loans to financial institutions increased to 125.84 trillion yen.

Exchange-traded funds (investment funds traded on stock exchanges) hold up 20.7% to 35,880 billion yen.

The Bank of Japan is stepping up ETF purchases in the midst of market turmoil. ETF holdings are currently 51.51 trillion yen, and the BOJ’s unrealized profit at the end of March was 15.44 trillion yen.

However, the central bank estimates that if the Nikkei Stock Average of 225 stocks drops to about 20,000 shares, it will incur potential losses. On Thursday, the Nikkei closed at 28,549.01.

The pandemic further moved the BOJ’s inflation target further and urged fine-tuning policy tools to make monetary easing sustainable while addressing side effects.

One of the changes made in the March review was to remove the bank’s goal of buying ETFs at a rate of 6 trillion yen a year in response to criticism that aggressive purchases have become top holders. Was to carry out flexible asset purchases. Japanese Equity — Distorted Market Mechanism.

Bank of Japan policymaker Jin Suzuki said Wednesday that central banks need to continue buying ETFs, but should “control” the pace of increase in holdings due to their impact on their balance sheets.

In a policy review, following criticism that the BOJ’s large-scale purchases have absorbed market liquidity, the BOJ will allow 10-year Treasury yields to move more widely than before by adjusting purchases. Was also decided.

Through banking efforts to keep both short-term and long-term interest rates low and stable, banks have already swallowed large amounts of Japanese government bonds and own more than 40% of outstanding government bonds.

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The BOJ chief began to see the light at the end of the darkness …

The BOJ chief began to see the light at the end of the darkness …


Haruhiko Kuroda, the governor of the Bank of Japan, said the introduction of the COVID-19 vaccine was beginning to reveal light at the end of the dark pandemic tunnel, but warned of the risks of an uneven economic recovery.

In his opening remarks at a conference hosted by the Bank of Japan’s research institute on Monday, Mr. Kuroda said that pandemics could bring about various changes in society, accelerate digitization, increase productivity, and benefit individuals and businesses. He said he had sex.

Still, Kuroda said he needs to pay attention to the possibility that the growth outcomes of digitalization will be concentrated in “a small part of society.”

“We are beginning to see light at the end of this pandemic tunnel, but it does not clearly show the shape of the society and economy we are approaching,” Kuroda told the conference online.

The fragile and heterogeneous nature of economic recovery is a source of concern worldwide. Japan is still struggling to control infections with vaccines that lag behind the United States and elsewhere, so there is an increasing gap between manufacturers and non-manufacturers at the pace of recovery.

According to Kuroda, the challenges facing central banks will shift from providing liquidity support to addressing issues such as solvency and corporate viability.

Kuroda said last week that the central bank would consider expanding its scheme to support corporate financing after the end of September in response to the impact of the COVID-19 crisis.

“At the same time, policy makers are facing the additional challenges of economic inequality that became more apparent during the health crisis and the growing global concern about climate change,” he said. Told.

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Former BOJ members do not see rate cuts without a new crisis

Former BOJ members do not see rate cuts without a new crisis


According to Makoto Sakurai, whose term ended last month, the Bank of Japan is very unlikely to see a large negative interest rate deepen without a new economic crisis.

“The Bank of Japan did not cut interest rates,” Sakurai said in his first interview since leaving the central bank two weeks ago, even in the midst of a pandemic shock last March. “The kind of historic crisis needed to trigger a cut rarely happens.”

Mr. Sakurai, who was regarded as a central supporter of the nine boards of President Haruhiko Kuroda, has also been able to bring banks closer to interest rate behavior with the introduction of new lending incentives in the policy review last month. Said he didn’t.

His statement is that the BOJ’s rate cuts remain high and, despite efforts to show that the central bank is ready to do so last month, weak inflation alone is not enough to trigger such a move. is showing. His comments could also reinforce the view among some investors and economists that they have announced lending incentives primarily to give the impression that the Bank of Japan has not dialed back stimulus measures.

“The challenge for continuing easing is the harsh business environment for banks due to prolonged low interest rates,” Sakurai said, characterizing the review as a way to maintain stimulus over the long term. “It was very important to deliberately set up mechanisms to provide banks with some relief and mitigate the effects of possible rate cuts.”

Incentives introduced last month reward commercial banks for lending money by paying various interest rates on some of the BOJ’s deposits. Under incentives, deeper rates automatically increase the rewards for lending money.

The Bank of Japan has also decided to buy equity funds in a more flexible way amid growing criticism that it has pushed stock prices to their 30-year highs after becoming the largest single-holder of Japanese equities at the end of last year. Decided.

That extra flexibility, coupled with the BOJ’s clearer than expected yield range, has allowed banks to cut back on asset purchases. This is a move that is considered a rewind of the stimulus by some economists.

“The Bank of Japan only needs to buy ETFs when the financial markets are in a panic. Such opportunities rarely occur, so there will be few purchases,” Sakurai said. “In my view, ETF purchases should be zero or unlimited, depending on market conditions.”

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Haruhiko Kuroda becomes the second longest BOJ government …

Haruhiko Kuroda becomes the second longest BOJ government …


The Bank of Japan’s governor, Haruhiko Kuroda, has become the second longest serving head of the central bank, promising to achieve 2% inflation in 2013 through a major monetary easing policy called “Kuroda Bazooka.”

However, Kuroda’s term is expected to end in April 2023, and fulfilling his promise to reach the inflation target is new as the longest-serving chief in central bank history dating back to 1882. It may be much more difficult than setting a record.

Mr. Kuroda passed Masamichi Yamagiwa, who was the governor of the Bank of Japan from November 1956 to December 1964, in second place, and the service time on Wednesday was 2,941 days.

Mr. Kuroda is 76 years old and has about two years of incumbent, and he will be the longest-serving chief of the Bank of Japan by following the 3,115 days served by Hisato Ichimada from June 1946 to December 1954. It is likely to be. Impact on finance and other industries.

Mr. Kuroda is a financial expert, served as the country’s top currency diplomat after the Asian financial crisis that broke out in 1997, and was the president of the Asian Development Bank.

The BOJ’s series of measures taken under Kuroda, including the aggressive purchase of assets such as Japanese government bonds and exchange-traded funds, has so far failed to bring Japan closer to its 2% target. Hmm.

The monetary base (central bank distribution funds and checking deposits), which is one of the indicators of the degree of monetary easing, reached a record high of 643.61 trillion yen (5.8 trillion dollars) at the end of March while the BOJ’s balance sheet was expanding. did. ..

Mr. Haruhiko Kuroda, Governor of the Bank of Japan, will give a lecture at a press conference held in Tokyo on March 19.Bloomberg

In mid-February, a month before the Bank of Japan reviewed its policy tools, Kuroda admitted that it is still difficult to reach the 2% target in 2021, 2022 and even 2023. Must be. ” A brace for long-term monetary easing.

The Bank of Japan initially aimed to achieve 2% inflation in two years, but then repeatedly postponed it. Kuroda promised to reach his goal “as soon as possible” without specifying when.

The core consumer price index, excluding perishables, fell 0.4% in February from a year ago. The central bank plans to announce the price outlook for 2023 in late April.

Kuroda said the Bank of Japan’s unprecedented monetary easing has brought benefits such as economic recovery, growth in corporate profits and rising wages. However, according to the governor, an unexpected coronavirus pandemic has undermined these improvements.

In March, the Bank of Japan held a broad framework of keeping short-term interest rates at minus 0.1% and long-term interest rates, while maintaining some of the new side effects of longer-than-expected easing. I made some adjustments. Almost zero percent.

The Bank of Japan is now able to move long-term interest rates to a wider extent than before as it seeks to bring its bank’s growing presence back to the bond market.

Already a top holder of domestic stocks, but only when necessary, buy investment products, including ETFs or stocks that track the Tokyo Stock Price Index.

Banks’ net assets swelled to 714.23 trillion yen at the end of March, with Japanese government bonds accounting for more than 70% and ETFs accounting for about 5%.

Kuroda and the Bank of Japan watchers agree that it is still premature to talk about the escape from the steps that led the central bank to an unknown territory.

The governor has dispelled the risk of returning to nightmarish deflation for policy makers, despite claiming that the Japanese “deep-rooted” view that prices are unlikely to rise remains.

The coronavirus pandemic raises the possibility that wage growth will slow as economists expect it to take longer to recover from the economic downturn.

On the price side, under pressure from Prime Minister Yoshihide Suga, some retailers are cutting prices and major mobile phone companies are cutting data charges.

“Theoretically, when more money is in circulation, prices go up. But the problem is that even with Kuroda Bazooka, consumers don’t get much money,” said Daiwa Securities. Toru Suehiro, a senior economist, said.

“It will be difficult to discuss withdrawal (from accommodative monetary policy) before Mr Kuroda’s term ends and he is ready to ease continuation,” he said.

“The need for a legacy of the BOJ’s chieftain will shift the focus to supporting green investment and strengthening the central bank’s commitment to digital currencies,” Suehiro said.

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