For the first time in history, both the ECB and BoJ balance sheets have grown larger than the Fed's.
The BoJ’s balance sheet topped the JPY500tn (USD4.48tn) mark at the end of May, central bank data showed today.
Furthermore, the latest data also shows the pace of the increase in BoJ's holdings has slowed considerably in recent months.
At the end of May, the central bank’s holding was up JPY70.7tn from a year earlier, more than 10% below the BoJ's official guideline of an annual increase of JPY80tn.
However, its the ECB and BOJ buying that is keeping the world's equity markets alive since The Fed ended QE3.
So what happens next?
The Fed has attempted to make the market believe that it will run down the balance sheet as it matures... Which will be a lumpy tightening in monetary conditions...
And unless someone steps up, the global central bank balance sheet will collapse, and that will not end well for global equity markets.
Is this what happens next?
remember last time BoJ tried to reduce balance sheet? pic.twitter.com/uRbZdsDhjz— Aurelija Augulyte (@auaurelija) April 6, 2017
or will the world lose faith in its reserve currency before?