Bank of Japan's Huge Bond Losses Highlight Quandary of Ending Stimulus
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The Bank of Japan has racked up $71 billion in losses on its bond holdings in 6 months, a record amount. This could delay ending its 23 years of aggressive quantitative easing.
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The BOJ's huge balance sheet and low interest rates were meant to revive Japan's economy but are now permanent features.
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Japan is struggling with low approval ratings for its leader, rising inflation, and echoes of "Japanification" in China's economy.
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Warren Buffett made profitable investments in Japan recently, aided by corporate governance reforms and near-zero interest rates from the BOJ.
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The BOJ is now trapped by dependence on its stimulus, making an exit difficult even as it loses money quickly, like the entire GDP of Uruguay in 6 months.