Japan’s central bank once again tried a series of clever policy changes this week. It pledged to target the ten-year Japanese government bond yield. It also upended conventional wisdom and the meaning of words by making its inflation target something it wants to overshoot as a matter of course.
Haruhiko Kuroda, the governor of the Bank of Japan, has overseen the most rampant balance sheet expansion in memory. Japan’s central bank now owns more than a third of the JGB market, and is buying 80 trillion $789 billion more every year. It buys 6 trillion worth of exchange-trade funds a year, and 90 billion of Japanese Reits.
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