The Bank of Japan to Consider Slowing Down the Pace of Reducing Bond Purchases Next Year

Four sources familiar with the Bank of Japan's thinking stated that the Bank of Japan is considering slowing down the pace of reducing its bond purchase scale starting from the next fiscal year. This move would indicate its focus on avoiding large-scale turmoil in the bond market. Last month, Japan's ultra-long-term government bond yields soared to record highs, reflecting investors' concerns about Japan's deteriorating public fiscal situation. The sources said there is no consensus within the Bank of Japan, with some believing that the central bank should focus on reducing its intervention in the bond market, thus preferring to maintain the current pace. The Bank of Japan will make a final decision at its next policy meeting on June 16-17, when it will evaluate the current debt reduction plan, which continues until March, and propose a follow-up plan for after April 2026. (Jin10)