A pedestrian proceeds from the Bank of Japan (BOJ) building in Central Tokyo on 28 July 2023.
Richard A. Brooks | AFP | Getty images
The Central Bank of Japan said on Tuesday that it would slow down the cut in government bond procurement from April next year, while it kept the benchmark rate at 0.5% amidst the risks of increase.
Bank of japanWhose rate was in accordance with expectations from economists voted by Reuters, Repeated It will continue to reduce the monthly purchase of about 400 billion yen ($ 2.76 billion) in about 400 billion yen ($ 2.76 billion) per quarter by March 2026 by March 2026. Mentioned in your plan Last year.
After this, from April 2026 to March 2027, the reduction of 200 billion yen will slow down in the quarter, which will target about 2 trillion yen monthly purchase amount.
The Central Bank will make another interim assessment in its June 2026 monetary policy meeting.
The BOJ reported that the move aims to “improve the functioning of JGB markets in a way that supports stability in markets.”
Its purchase rate is expected to be around 4.1 trillion yen during a month. Quarter ends on June 2025,
After the decision, Nikkei 225 Received 0.55%, whereas Yen 0.13% strengthened to trade at 144.55 against the dollar. The 10-year-old JGB yield climbed to 1.491%on 3 basis points.
HSBC Global Research said last week that the 2 trillion yen was a “natural” level, stating that it would be around the volume of JGB that BOJ had bought monthly before the start of its ultralose monetary policy in April 2013.
APAC economist Krishna Bhimwarpu, APAC economist of State Street Global Advisors said, “The fact that BOJ will not slow down its JGB purchase until next year Q1, symbolizes a slight victory for the bank next year. This is because markets do not require immediate help in managing the recent increase in yields.”
The 30-year-old JGBS was shot by a height of multi-decade at the end of May, with a high of 3.2% on May 21, before falling to its current level of about 2.93%.
While the bank has indicated that it will reduce the cut to buy bonds, Boj Governor Kazuo Uda Last week, Japan’s Parliament was reportedly allegedly told that the central bank “Once we have more confidence that the underlying inflation would continue to hover 2% or around that level.”
Japan’s economy faces uncertainty, while inflation lasts over the target of BOJ for about three years.
Boj Said that Japan’s economic growth is likely to be “liberal”, saying that factors, including trade, will lead to recession and domestic corporate profits in foreign economies.
The central bank said that assistance is expected.
Inflation has been high in the country, partly due to lack of rice, the shooting of rice prices and the government of Japan released the prices of emergency stockpiles.
Country’s principal inflation rate The April came at 3.6%, indicating more than three years that inflation lasted above the 2% target of BOJ.
Japan’s GDP also shrunk 0.2% In the march end Compared to the preceding period with a decline in exports, the first time in a year was marked that the economy had contracted on a fourth-by-wage basis.
