Deutsche Securities: The Bank of Japan may decide to halt scaling down its monthly bond purchases

Golden Ten Data reported on June 16 that Kentaro Koyama, chief economist at Deutsche Securities, stated that if the Bank of Japan decides to stop reducing its monthly bond purchases, it must provide a thorough explanation, especially as some media have reported that the Japanese government may tacitly permit further interest rate hikes on the condition that the Bank of Japan stops scaling back bond purchases. If the Bank of Japan both raises interest rates and halts its bond purchase reduction at the same time, regardless of its actual intentions, markets and the public may interpret this as a “political deal” reached with the government. This poses a serious risk of triggering doubts about the independence of the Bank of Japan.