IDEAS home Printed from https://ideas.repec.org/p/boj/bojrev/rev26e10.html

Impact of the Bank of Japan's Reductions in JGB Purchases on the JGB Markets

Author

Listed:
  • Monetary Affairs Department, Financial Markets Department

    (Bank of Japan)

Abstract

Since summer 2024, the Bank of Japan has been gradually reducing its outright purchase amount of long-term Japanese government bonds (JGBs), based on a plan decided at its Monetary Policy Meeting (MPM), so that the Bank can improve the functioning of the JGB markets in a manner that supports stability in the markets. While the impact of these reductions on interest rate formation has gradually realized, it is suggested that the recent rise in long-term interest rates has been driven, to a certain extent, by fundamental factors such as the rise in the underlying inflation. The functioning of the JGB markets has been steadily improving as the Bank makes progress in reducing its JGB purchases, with long-term interest rates being formed more freely in the financial markets. While Japanese investors such as banks and households have gradually increased their JGB holdings, such portfolio adjustments are likely to take some time. The Bank going forward will continue to carefully monitor developments in these portfolio adjustments as well as trends in the JGB markets and their functioning as such progress unfolds.

Suggested Citation

  • Monetary Affairs Department, Financial Markets Department, 2026. "Impact of the Bank of Japan's Reductions in JGB Purchases on the JGB Markets," Bank of Japan Review Series 26-E-10, Bank of Japan.
    • Handle: RePEc:boj:bojrev:rev26e10
    as

    Download full text from publisher

    File URL: https://www.boj.or.jp/en/research/wps_rev/rev_2026/data/rev26e10.pdf
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:boj:bojrev:rev26e10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bank of Japan (email available below). General contact details of provider: https://edirc.repec.org/data/bojgvjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.