The Japanese prime minister is called Shinzo Abe. He has created a new form of Economic Policy in Japan since coming to power that is is now known as Abenomics. It is brutal strategy to kick start Japan’s stagant economy, that has delivered next to zero growth for 20 years.

In essence, Abenomics is a policy designed to deflate the yen to boost exports. The policy is based on simply unprecedented monetary stimulus by the Bank of Japan undertaking huge bond purchases (Quantative Easing), extra budget spending by government borrowing and pro-growth policies such as an offer of tax breaks to companies investing in new equipment and facilities. What this has done, is to force down the value of its currency to give its domestic exporters a competitive advantage.

Thus it should be no suprise, that the Japanese Stock Market Index of the Nikkei 225 has done incredibly well in the past few weeks.

Others could think, Japan is embarking on a currency war, to drive down the value of the Yen to make its Japanese exports cheap. The debate will rage, but one question that is very hard to answer, with the Bank of Japan owning all these JGB’s (Japanese Government Bond’s) how will the BoJ sell these bonds (unwind / exit) ?