BOJ cuts monthly bond purchase amount by 400 billion yen

[TOKYO] The Bank of Japan on Friday (Dec 26) announced a 400 billion yen (S$3.28 billion) reduction in its monthly bond purchases, continuing its gradual retreat from the market it came to dominate over a decade of massive monetary stimulus.

The central bank will buy about 2.9 trillion yen of Japanese government bonds (JGBs) monthly in the first quarter, keeping to an announced schedule for steadily slimming down its debt holdings.

Reductions were seen across bonds ranging from one to 25 years remaining to maturity, while purchase amounts for the shortest and longest securities were left unchanged.

The BOJ holds auctions to buy JGBs once a month for some maturities and up to three times a month for others. The central bank announced its quantitative tightening plan in July 2024 to reduce a balance sheet that had swelled to some US$5 trillion.

According to the plan, the bank will reduce purchases “in a predictable manner, while allowing enough flexibility to support stability in the JGB markets.” REUTERS