Bank of Japan holds $4 trillion of outstanding government bonds: Military hike

Bank of Japan holds $4 trillion of outstanding government bondsMilitary hike

Sawako Utsumi and Lee Jay Walker

Modern Tokyo Times

Prime Minister Fumio Kishida of Japan is known for grim figures. This concerns endless monthly trade deficits, to 67% of all coronavirus deaths on his watch, the decline in real wages of 2.6%, and now planning an increase in corporation taxes along with taking money away from the Tohoku region (immediate funding of reconstruction after the earthquake and tsunami of 2011 is being reduced and spaced out) to support the militarization of Japan. Therefore, Kishida continues to ignore bread-and-butter issues.

The decline of the Yen to Dollar rate entailed that the BOJ intervened in propping up the Yen. Initially, the Yen to Dollar rate was 110 when Kishida took office. However, the currency weakened under Kishida. Thus the BOJ intervened to support the Yen against the Dollar. 

Kishida now looks set to hinder the growth of wages by imposing a planned hike in corporation taxes to support his doubling of the military budget. This concerns his anti-China and anti-Russian Federation rhetoric. Hence, with successive governments turning to endless borrowing along with the BOJ propping up the Yen under Kishida, the BOJ now holds a staggering $4 trillion worth of Japanese government bonds (a majority of 50.26% holdings for the first time)

Jiji Press reports, “The latest figure was sharply up from 11.55 pct at the end of March 2013, soon after incumbent BOJ Governor Haruhiko Kuroda took office, reflecting the central bank’s continued JGB purchases under its massive monetary easing policy.”

Kyodo News reports, “The gobbling up of government bonds has depressed borrowing costs for businesses and households, but the BOJ’s swelling balance sheet will pose a challenge if it decides to explore an exit. The central bank appears in no hurry to tweak its monetary easing policy at present.”

Astonishingly, in the six months before September, the unrealized loss in yen terms of 874.9 billion occurred. This loss was generated because the BOJ is sticking to its monetary easing policy despite the prevailing international economic conditions concerning interest rates. 

Next year, the state budget is set to be a new record of $834 billion (114 trillion yen). This concerns Kishida’s militarization and rising social security costs. Therefore, while the fiscal health of Japan continues to deteriorate – Kishida is putting further strains on the economy by doubling the military budget at a time when real wages have fallen by 2.6% in 12 months. 

https://english.kyodonews.net/news/2022/12/8767f4c28867-boj-owned-half-of-outstanding-japan-govt-bonds-for-1st-time.html

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