Shinzo Abe, Bank of Japan: debt-monetizing policy

August 1, 2016
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The monetizing the nation’s debt of Japan was one of the issues to discuss with the top advisers of Prime Minister Shinzo Abe. On of the adviser announced he favors a declaration by Japan’s policymakers regarding debt-monetizing measures. Koichi Hamada, a former Yale University professor, tries to find clear answers to questions on this policy.

According to Hamada, de facto monetization should be rather highlighted to change a psychology of the investors. On Friday Bank of Japan (BOJ) during the meeting decided to conduct a comprehensive assessment of debt-monetizing policy’s measures in autumn. Next time BOJ will gather the meeting on September 20-21.

In fact, The observers do not expect from the Bank of Japan a repaying of the government bonds, the bank holds more than one-third of these securities. So, experts do not believe that this debt ever is back in the hands of private investors.

Earlier, in 2014, management of the Bank of Japan has already discussed the strategy of maintaining a large balance. That time the bankers tried to avoid sudden swings in bond yields when the central bank has reached its inflation target.

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