BOJ JGB purchase next month to 100 billion yen reduction Aiming to prevent interest rate decline August 30 21:01
The Bank of Japan, which is buying a large amount of government bonds to induce low long-term interest rates, has announced that it will reduce the amount bought next month. The long-term interest rate has been lowered to a level approaching the lowest ever, and it seems that there is an aim to prevent further decline by suppressing the amount purchased.
As part of a large-scale monetary easing, the BOJ is buying large amounts of government bonds to induce long-term interest rates to around 0%.
The maximum amount of JGBs purchased per transaction has been around 650 billion yen for JGBs with a remaining period of 5 to 10 years.
However, the Bank of Japan announced a policy on the 30th that it will be about ¥ 550 billion next month, about ¥ 100 billion less than before.
In the bond market where government bonds are traded, Japanese government bonds, which are considered to be relatively safe, have been bought, and the price of government bonds has been rising recently, as the global economy has been wary of the US-China trade friction.
Since government bonds have a relationship of lowering yields as prices rise, long-term interest rates have fallen to minus 0.29%, approaching the record low of minus 0.3% three years ago.
There are concerns that financial institutions will become increasingly difficult to manage if interest rates fall too low in the market, and the Bank of Japan seems to have the aim of preventing further declines by reducing the amount of government bonds purchased.