Bank of Japan Balance Sheet Charts

Inline with our intention to present many more central bank balance sheet charts over the coming months, here we present several charts of the Bank of Japan’s balance sheet in the usual format.

 

Bank of Japan Total Balance Sheet Size Chart

Total Size of the BoJ's Balance Sheet - Click to enlarge. Source: Bank of Japan

 

In stark contrast to the Eurosystem and the Federal Reserve system, the Bank of Japan’s balance sheet has remained relatively stable over recent years. As can be seen on the chart above, the total size of the BoJ’s balance sheet is still below the levels seen in December 2005! This should be a bit of a clue as to why the JPY continues its charge higher against the major currencies of the world (in particular against the USD):

 

USDJPY Weekly chart

USDJPY (how many Japanese yen it takes to buy one US dollar) - Weekly Chart - Click to enlarge. Source: FINVIZ.com

 

Bank of Japan Balance Sheet Chart - ASSETS

Assets of the Bank of Japan - Click to enlarge. Source: Bank of Japan

 

Drilling down to the specific items on the assets side of the BoJ’s balance sheet we find that the quantitative stability mentioned above has been accompanied by qualitative stability. That is, the major assets have remained stable through time; the Japanese Yen has continued to be ‘good for’ Japanese Government Bonds, Financing & Treasury bills and Loans against pooled collateral. Although the quality of these items may have deteriorated over the years, we cannot help but conclude that the assets of the BoJ have remained in relatively good shape in recent years.

 

Bank of Japan Balance Sheet Chart - ASSETS (PROPORTIONAL)

Asset of the Bank of Japan presented on a proportional basis - Click to enlarge. Source: Bank of Japan

 

Looking at the assets on a proportional basis, we find evidence to confirm that the composition of the BoJ’s assets has remained stable. We would only note that the proportional holdings of JGBs and loans backed by pooled collateral have been increasing slowly at the expense of the shorter-term bills. Also, the BoJ’s favorite folly of intervening in the currency markets has been evident from the occasional blips in foreign currency assets.

 

Bank of Japan Balance Sheet Chart - LIABILITIES

Liabilities of the Bank of Japan - Click to enlarge. Source: Bank of Japan

 

In contrast to the explosion in ‘Reserve balance’ liabilities seen on the liabilities sides of the Fed’s & ECB’s balance sheets, the BoJ deposit liabilities have only increased slightly. Banknotes remain the primary liability of Japan’s central bank.

 

Bank of Japan Balance Sheet Chart - LIABILITIES (PROPORTIONAL)

Liabilities of the Bank of Japan presented on a proportional basis - Click to enlarge. Source: Bank of Japan

See here for our collection of rare historical economic data.

Posted Sep 4, 2011
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  • jackdoitcrawford

    Seeing in the WSJ Monday, Jul 29, 2013 that Japan has the highest debt to GDP ratio, I was thinking, “This is strange when I know that Japan also holds more of USA debt than all the other countries except maybe China. How can they be in debt and hold so much debt at the same time?” Unfortunately these graphs don’t help me answer that question. Neither did the WSJ’s article.