What's next in the BOJ bag of tricks

What if QE and negative rates don't work?

There is no end to the amount of monetary 'doubling-down' that central banks will do in the 21st century. Japan has bought untold amounts of bonds and is delving into other markets. The experiment with negative interest rates, so far, has been a flop.

So what's next?

Even if the latest round of troubles fizzles, a recession will eventually hit. AEP looks at some of the options for the BOJ but concludes:

"The BOJ and its peers in Europe and the US may have to resort to variants of "helicopter money" and the blanket funding of New Deal programmes to counter the next recession. None is yet ready to cross the Rubicon, and the markets know it."

Those last 5 words are telling.