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Thursday, March 28, 2024

REVISITING JAPAN’S REACTION TO QE

REVISITING JAPAN’S REACTION TO QE

Courtesy of The Pragmatic Capitalist 

When the BOJ first announced QE in Japan in March 2001 the Nikkei 225 went wild.  Over the following 6 weeks equities rallied over 16%.  The reaction has been almost identical in the S&P 500 over the last 2 months.  But as investors in the USA begin to realize that QE is not the panacea it was first advertised as the S&P 500 has begun to reverse course.  In Japan, this was a scenario that did not end well as equities declined 43% in the following two years.  Although history rarely, if ever repeats, this is one chart that might be worth taking note of:

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