Bank of Japan'S Monetary Easing Measures : Are they Powerful and Comprehensive?

Author/Editor: Raphael W. Lam
Publication Date: November 01, 2011
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: With policy rates near the zero bound, the Bank of Japan (BoJ) has introduced a series of unconventional monetary easing measures since late 2009 in response to lingering deflation and a weakening economy. These measures culminated in a new Asset Purchase Program under the Comprehensive Monetary Easing (CME) which differs from typical quantitative easing in other central banks by including purchases of risky asset in an effort to reduce term and risk premia. This note assesses the impact of monetary easing measures on financial markets using an event study approach. It finds that the BoJ's monetary easing measures has had a statistically significant impact on lowering bond yields and improving equity prices, but no notable impact on inflation expectations.
Series: Working Paper No. 11/264
Frequency: Biannually
Subject(s): Financial assets

Author's Keyword(s): Monetary and Credit Easing | Quantitative Easing | Large-scale Asset Purchases
Publication Date: November 01, 2011
ISBN/ISSN: 9781463924638/1018-5941 Format: Paper
Stock No: WPIEA2011264 Pages: 18
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