Is The Fed Blindly Following Failed Policies Of The Bank Of Japan?

Let's compare Bank of Japan's actions and statements since 2016 with recent Fed actions and statements.

BOJ vs Fed Comparison Criteria

  • No Upper Limit
  • Commitment to Overshoot
  • Buy ETFs
  • Unlimited Time Frame (Until it Works)

Bank of Japan Actions

  1. January 21, 2021, Monetary Policy Statement: The Bank will purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields will remain at around zero percent. 
  2. October 29, 2020, Monetary Policy Statement: The Bank will purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields will remain at around zero percent
  3. April 27, 2020: Bank of Japan vows to buy government bonds 'without upper limit'
  4. July 7, 2017: Bank of Japan offers to buy unlimited amount of bonds to calm markets
  5. October 2016: The Bank Of Japan Breaks New Ground Yet Again--And It May Work This Time
  6. The BOJ has been buying ETFs for a decade as part of efforts to drag the world's third-biggest economy out of deflation. Its policy at the moment is to buy ETFs at an average annual pace of roughly 6 trillion yen, a commitment that forces it to keep buying even when stocks are booming.

The table of contents for the October 2016 article is interesting. 

Oct 2016 Table of Contents

  • Doubling Down, Not Throwing in the Towel
  • Making Sense of the New Framework
  • Quantity and Price: Is the BOJ Trying to Have Its Cake and Eat It Too?
  • An Exit Strategy Could Be in the Making
  • Commitment to Overshoot Inflation Target
  • Where the BOJ Goes, Others Tend to Follow

Exit Strategy, Making Sense, May Work?!

What a hoot. 

The rest could hardly be more prophetic especially the final bullet point.

Spotlight on Bank of Japan's Yield Curve Control

Please consider Global Bond Rout Puts BOJ's Yield Curve Control in Spotlight.

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