With BoJ plunge protection underwriting a relentless risk asset rally that, in conjunction with nonexistent wage growth (both on a nominal and a real basis), is working to eliminate Japan’s middle class even as it sends stocks to new highs and enriches those who hold financial assets at the expense of those who do not, some wonder if perhaps throwing the government’s printing press at equity markets on the way to saddling the central bank with a multi-trillion yen ETF portfolio isn’t likely to create bubble conditions that could imperil the entire economy. 

Not so, says Japan’s Economics Minister Akira Amari because as Reuters reports, smallish bubbles are actually a good thing: 

Amari, who spoke after the Nikkei stock average briefly hit a 15-year high, said the rise [in stock prices] reflects expectations that corporate earnings will improve further and noted that the government needs to put policies in place to ensure this happens.

It is unusual for a policymaker to speak approvingly of an asset price bubble as the danger of it popping and wreaking economic havoc is well documented.

However, Japanese Prime Minister Shinzo Abe's government has placed a lot of emphasis on lifting stock prices to increase returns for individual investors in the hope that they spend some of this money and revive the economy.

"The larger a bubble becomes, the harder it is to control," Amari told reporters.

"A small bubble is something that can be contained. If recent stock gains are signs of a mini-bubble, this is something I would welcome."

Well that’s good to hear because as the following chart (which shows the spread between closing prices for the Dow and the Nikkei) seems to demonstrate, there may indeed be a “small” bubble in Japanese stocks thanks in no small part to the central bank’s decision to become the second-largest holder of equities in the entire country:

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Of course it's also possible we just don't know up from down which is why we thought bubbles were inherently dangerous in any size and which is why we also mistakenly thought that a multi-trillion yen equity portfolio could be fairly classified as "large," an assumption Haruhiko Kuroda later assured us was erroneous. 

Bonus chart: plunge protection...