BOJ cuts monthly bond purchase amount by 400 billion yen, as expected

[TOKYO] The Bank of Japan on Tuesday (Sep 30) announced a further 400 billion yen (S$3.48 billion) reduction in its monthly bond purchases, as it continued its gradual retreat from the market it dominates following a decade of unprecedented stimulus.

The central bank will buy about 3.3 trillion yen of Japanese government bonds monthly in the fourth quarter, keeping to an announced schedule for steadily slimming down its massive 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 Japanese government bonds 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 of last year, 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