The Japanese bond purchase programme has already had a material effect on financial prices around the world. It will now alter the global investment landscape by changing the nature and size of capital flows. Yet once the initial excitement passes, the real question will become whether it adds to, or subtracts from, the longer-term stability of the global monetary system.

The Japanese programme is massive: in absolute terms (some $75bn per month); relative to where bond prices stood (the 10-year Japanese government bond interest rate was already very low); and even compared to the Federal Reserve’s QE3 (which involves monthly purchases of $85bn for an economy with a GDP three times larger than Japan’s). Anchored by a 2 per cent inflation objective, the Japanese programme is also slotted to persist for a long time.

Realising this, market participants have already adjusted financial prices. The most dramatic move is in the yen, and justifiably so: unlike the US, where domestic components of aggregate demand would be expected to do the heavy lifting, the Japanese programme’s success depends on its ability to capture market share from other countries.