Are the ECB and BoJ approaching the limits of conventional QE programs?

Financial conditions have barely eased in the Eurozone and Japan…

The ECB and Bank of Japan have pursued broader-based and upgraded QE programs since the Covid-19 shock. These are variations on “conventional QE” schemes, supplementing government bond purchases with expanded purchases of corporate bonds and easing collateral requirements to include bonds that were “fallen angels” on April 7 (ECB). The BoJ has also doubled the target for its equity ETF purchases and trebled the target for corporate bond and commercial paper purchases, to JPY 20 trillion.

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