The Bank of Japan decided to suspend the reduction of bond purchases starting from July next year

On June 16, the Bank of Japan stated that at today's monetary policy meeting, the Bank of Japan's Policy Committee reviewed the development and operation of the Japanese government bond market and discussed the future policy for purchasing government bonds. In principle, long-term interest rates should be formed by financial markets, so it is appropriate for the central bank to purchase treasury bonds in a predictable manner, while retaining sufficient flexibility to support the stability of the treasury bond market. Based on this idea, in order to improve the operating efficiency and stability of the government bond market, the central bank decided with a 7 - 1 majority to take the following measures: The central bank will, in principle, reduce the monthly purchase plan of Japanese government bonds by approximately 200 billion yen every calendar quarter from now until January to March 2027. Starting from April 2027, its monthly purchase limit of Japanese government bonds will remain at approximately 2 trillion yen. If long-term interest rates rise rapidly, the Bank of Japan will adopt flexible response measures, such as increasing the scale of Japanese government bond purchases, conducting fixed-rate purchase operations of Japanese government bonds (both operations are not subject to the monthly purchase plan of Japanese government bonds), and conducting fund-supply operations targeted by collective guarantees. In addition, the Bank of Japan will not conduct a mid-term evaluation of the Japanese government bond direct purchase plan in the future. However, the central bank is prepared to adjust the purchase speed of Japanese government bonds when deemed necessary at the monetary policy meeting based on the basic ideas for purchasing Japanese government bonds and other factors such as the trend of the Japanese government bond market. (Jin Shi)