Here's The Part That Makes Japan's Monetary Policy Experiment So Experimental

Last week, new Bank of Japan governor Haruhiko Kuroda announced a massive bond buying program designed to help the Japanese economy overcome deflation.

The announcement was significant because investors have been pricing this decision into Japanese currency and equity markets for months – but Kuroda and the BoJ managed to go even bigger than the market was expecting.

The economics world is captivated by the monetary policy experiment underway in Japan.

What’s so special about it, though? Quantitative easing has been around for a while now, and the Federal Reserve already implemented open-ended bond buying in the United States in 2012.

What makes Japan’s program unique is its sheer size. The chart below illustrates this nicely.

Monetary bases as percentage of GDP

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