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Bank of Japan derivatives purchases threaten already low equity ratio
The BoJ's latest inflation targeting weapon could challenge its balance sheet strength
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The proposal to expand the Bank of Japan's asset purchase programme to include derivatives may prove challenging for the bank's balance sheet as it faces a historically low equity ratio.
The Bank of Japan's nominee governor, Haruhiko Kuroda, said the bank may buy derivatives to pursue its inflation target of 2% in the next two years. The unconventional policy stance comes as a re-enforcement of the new leadership of the central bank under the Liberal Democratic Party (LDP) government whose
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