An In-Depth Look at the Bank of Japan's Balance Sheet

Five years have passed since the Bank of Japan (BOJ) rolled out its quantitative and qualitative easing (QQE) programme in April 2013 under Governor Kuroda. After taking a closer look at the US Fed's balance sheet a few weeks back, I decided to do the same for the BOJ's balance sheet to see what we can learn.px.gif

To start off, we need to grab data on the BOJ's accounts in CSV format from the BOJ's statistics portal. Head over to “Statistical data search”, click on “Balance Sheets of the Bank of Japan and Financial Institutions”, and then select “Bank of Japan Accounts[BS01]”. Choose “Bank of Japan Accounts” in the first tab, select all available series in the second tab, and click through the rest of the options until you land on a page where you can download the data in CSV format. The file will sport a name like nme_*.csv, with the star replaced by a jumble of characters and numbers. Our R script will simply pick the first file matching this pattern.

boj.area.png

Interactive plotly chart · R script

We group the balance sheet items into broader categories to reduce complexity, and then transform the data to create a ggplot2 area plot and an interactive plotly bar chart. By multiplying liabilities by -1, we ensure they show up as negative values on the y axis. For the interactive plotly chart, we opt for a bar chart over an area chart to take advantage of plotly's ability to isolate different data series within bar charts. Click here for the interactive plot.

The plot nicely illustrates the various rounds of easing policies the BOJ has undertaken since the dawn of the new century: Quantitative Easing (QE) from March 2001 to March 2006, Comprehensive Monetary Easing from October 2010 to April 2013, Quantitative and Qualitative Monetary Easing (QQE) in April 2013, and the subsequent QQE with Yield Curve Control in September 2016.