May 31, 2021 • 20M

Why the Bank of Japan Bought $300 Billion of Stocks

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An audio version of the Asianometry YouTube channel. Maybe it will be more in the future. www.asianometry.com
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It is December 2020 and the Bank of Japan is now the single biggest shareholder of Japanese stocks. Over the span of a decade, the central bank bought hundreds of billions of dollars in Tokyo-listed stock ETFs as part of its monetary easing programs, sitting on a handsome $130 billion profit.

You might be forgiven for wondering if it is normal for a central bank to buy "stonks". It has never been done before in this way. Yet as Japan threatened to enter another era of economic stagnation and deflation, the bank decided to go where no bank has gone before in an effort to fight the future.

In this video, I want to dive into a controversial, groundbreaking program and the market-distorting effects that it has wrought on the world's third largest economy.