Japan's Economy
The Bank of Japan's Experiments
How the Bank of Japan pioneered quantitative easing, negative rates and yield curve control, and how it began exiting these in 2024.
The Bank of Japan (BOJ) tried many unconventional policies to fight deflation.
Quantitative easing
In 2001, the BOJ became the first major central bank to use quantitative easing (QE): buying assets to increase the money supply.
Massive QE
From 2013, under Governor Haruhiko Kuroda, the BOJ launched huge asset purchases, eventually owning around half of Japan’s government bonds and large amounts of stock funds.
Negative interest rates
In 2016, the BOJ introduced a negative rate of -0.1 percent on some bank reserves.
Yield curve control
Also in 2016, it began yield curve control, targeting the 10-year bond yield around zero.
Exiting
In March 2024, under Governor Kazuo Ueda, the BOJ ended negative rates, its first rate hike in 17 years, and scrapped yield curve control. It raised rates further afterwards.
Results
Policies helped weaken the yen and lift asset prices, but inflation stayed below target for years until global shocks pushed it up.
By the early 2020s, the BOJ owned roughly half of all Japanese government bonds, making it by far the largest buyer and holder.
Japan pioneered QE in 2001.
- The BOJ pioneered QE in 2001.
- From 2013, it made massive asset purchases.
- Negative rates and yield curve control began in 2016.
- In March 2024, the BOJ ended negative rates.
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