June 16, 2025
TOKYO – The Bank of Japan is considering easing the reductions in its government bond buying, beginning in April 2026, according to sources.
Under its current plan, the BOJ’s monthly buying of Japanese government bonds has been reduced by about ¥400 billion every quarter. But a proposal has been floated to reduce that figure to about ¥200 billion per month.
The central bank will discuss possible measures for beyond April 2026 at its policy meeting to be held on Monday and Tuesday. The current bond-buying reduction program was scheduled to run through March 2026, but the BOJ plans to continue the program for about a year.
Some BOJ officials want the reduction pace kept at the current level, saying the government bond market has been stable since the reduction program started in August 2024.
But if the long-term yields for Japanese government bonds go up as a result of maintaining the current pace, the central bank may be forced to temporarily increase purchases of the bonds. Therefore, there are also strong calls to adjust the reductions.
If the reduction program is extended for one year, the BOJ’s monthly Japanese government bond buying from January to March in 2027 would be about ¥1 trillion per month if the purchase amount is reduced by about ¥400 billion each quarter. It would be about ¥2 trillion per month if purchases are cut by about ¥200 billion per quarter.
The BOJ decided at a meeting in July 2024 on a plan to reduce its purchases of Japanese government bonds between August 2024 and March 2026. The central bank has begun quantitative tightening by reducing its government bond holdings, which has increased due to its massive monetary easing measures from 2013.