Latest news with #bondPurchases
CNA
11 hours ago
- Business
- CNA
BOJ decides to slow bond taper, keeps rates steady
TOKYO :The Bank of Japan kept interest rates steady on Tuesday and decided to slow the pace of reduction in its bond purchases from next fiscal year, signalling its preference to move cautiously in normalising still-easy monetary policy. As widely expected, the central bank maintained short-term interest rates at 0.5 per cent by a unanimous vote at the two-day policy meeting that ended on Tuesday. It also decided to make no changes to an existing bond taper plan that runs through March 2026 and laid out a new plan beyond April next year. Under the plan for fiscal 2026, the BOJ will reduce monthly bond buying by 200 billion yen each quarter so that the size of purchases will fall to around 2 trillion yen by March 2027.
Yahoo
11 hours ago
- Business
- Yahoo
BOJ decides to slow bond taper, keeps rates steady
TOKYO (Reuters) -The Bank of Japan kept interest rates steady on Tuesday and decided to slow the pace of reduction in its bond purchases from next fiscal year, signalling its preference to move cautiously in normalising still-easy monetary policy. As widely expected, the central bank maintained short-term interest rates at 0.5% by a unanimous vote at the two-day policy meeting that ended on Tuesday. It also decided to make no changes to an existing bond taper plan that runs through March 2026 and laid out a new plan beyond April next year. Under the plan for fiscal 2026, the BOJ will reduce monthly bond buying by 200 billion yen each quarter so that the size of purchases will fall to around 2 trillion yen by March 2027. BOJ Governor Kazuo Ueda will hold a news conference to explain the decision at 3:30 p.m. (0630 GMT). Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
11 hours ago
- Business
- Bloomberg
BOJ Holds Rates, Plans Slower Tapering of Bond Buying Next Year
The Bank of Japan left its benchmark rate unchanged and decided to taper its bond purchases at a slower pace next year in a sign of caution following heightened market volatility. The BOJ board led by Governor Kazuo Ueda kept its benchmark policy rate steady at 0.5% at the end of a two-day meeting, according to its statement on Tuesday.
CNA
18 hours ago
- Business
- CNA
BOJ to consider slower bond taper as fresh global risks emerge
TOKYO :The Bank of Japan will consider slowing reductions in its bond purchases next year under a quantitative tightening (QT) plan due on Tuesday, as the bank focuses on avoiding big market disruptions amid growing economic uncertainties. Those deliberations come as the BOJ faces fresh challenges in weaning the economy off a decade-long, massive stimulus that has kept interest rates ultra-low and left it with a balance sheet roughly the size of Japan's economy. At the same time, BOJ Governor Kazuo Ueda is likely to signal the bank's readiness in continuing interest rate hikes, as it weighs risks from U.S. tariffs against persistent domestic food inflation. "Although developments in trade policies since early spring have had a larger impact on Japan's economy than we had expected, progress towards achieving our price target continues to gain momentum," Ueda said in a speech on June 3, stressing the economy can withstand the hit from higher U.S. tariffs. At its two-day policy meeting ending on Tuesday, the BOJ is widely expected to maintain short-term interest rates at 0.5 per cent. Markets are focusing on the board's review of an existing bond-tapering plan running through the March end of the current fiscal year, and the announcement of a new programme that will extend through fiscal 2026. Sources have told Reuters the BOJ will make no big changes to the current QT plan and consider slowing the pace of tapering from next fiscal year. That would signal a preference to avoid disrupting markets in the wake of last month's spike in super-long government bond yields. In meetings with bond market players, the BOJ has received a sizeable number of requests to cut the quarterly taper size to around 200 billion yen ($1.38 billion) - which some policymakers see as a reasonable ballpark figure, according to the sources. Ueda is expected to hold a news conference at 3:30 p.m. (0630 GMT) to explain the policy decision. The BOJ ended its yield curve control and began tapering its huge bond buying last year. It also raised short-term rates to 0.5 per cent in January on the view Japan was making progress towards durably achieving its 2 per cent inflation target. Under the current plan laid out last July, the BOJ has been slowing bond purchases by around 400 billion yen ($2.77 billion) per quarter to halve monthly buying to 3 trillion yen by March 2026. If the BOJ were to cut bond buying by 200 billion yen per quarter from fiscal 2026, its monthly buying will fall to around 2 trillion yen by the March 2027 end of the business year. A Reuters poll showed just over half of respondents expect the BOJ to reduce the size of tapering from next fiscal year. Markets are also focusing on Ueda's comments for clues on the timing of the next rate hike. The BOJ's policy normalisation is at a crossroads as steep U.S. tariffs hurt Japan's export-heavy economy, forcing the board to cut its growth and inflation forecasts on May 1. But delaying rate hikes for too long could leave the BOJ behind the curve in dealing with inflationary pressure, as firms continue to pass on rising raw material and labour costs. Japan's core consumer inflation hit a more than two-year high of 3.5 per cent in April, well exceeding the BOJ's 2 per cent target, due to a 7.0 per cent surge in food prices that adds to prospects of steady wage hikes by firms faced with intensifying labour shortages. ($1 = 144.4400 yen)
Reuters
10-06-2025
- Business
- Reuters
BOJ to consider slowing bond taper as market jitters persist
TOKYO, June 10 (Reuters) - The Bank of Japan is expected to keep interest rates steady next week and consider slowing reductions in its bond purchases from next fiscal year, a move that would signal its preference to move cautiously in normalising still-easy monetary policy. But BOJ Governor Kazuo Ueda may deliver a less dovish tone on the interest rate outlook on prospects of a de-escalation in global trade tensions caused by U.S. President Donald Trump and persistent sticky domestic food inflation, analysts say. "If trade negotiations between countries proceed and uncertainty over trade policies diminish, overseas economies will resume a moderate growth path. That, in turn, will accelerate Japan's economic growth," Ueda said in a speech last week, signaling the BOJ's readiness to keep raising rates. At its two-day meeting ending June 17, the BOJ is widely expected to leave its short-term policy rate unchanged at 0.5%. Markets are focusing on the board's review of an existing bond-tapering plan running through the March end of the current fiscal year, and the announcement of a new programme that will likely extend through fiscal 2026. Sources have told Reuters the BOJ will make no big changes to the current taper plan and consider slowing the pace of tapering from next fiscal year - a move that signals a preference to avoid big market disruptions. Many analysts expect the BOJ to cut its quarterly taper size to around 200 billion yen from fiscal 2026, half the reduction under the current plan laid out last year. "The taper process has gone smoothly so far, though it makes sense to give markets some room for breather," said a source familiar with the BOJ's thinking. "The BOJ's basic approach is to allow market forces to drive yield moves," a second source said. "But it must also ensure its bond tapering doesn't cause big disruptions in the market." The BOJ ended its yield curve control and began tapering its huge bond buying last year as part of its effort to wean the economy off a decade of massive stimulus. It also raised short-term rates to 0.5% in January on the view Japan was making progress towards durably achieving its 2% inflation target. While risks to Japan's export-heavy economy from U.S. tariffs have pushed backed market bets on the next rate-hike timing, investors are on the lookout for any clues from Ueda on how soon rate increases could resume. Ueda is expected to hold a news conference at 3:30 p.m. (0630 GMT) on June 17 to explain the BOJ's policy decision. The BOJ sharply cut its growth and inflation forecasts at the previous meeting on May 1, when market volatility was at its peak due to fears Trump's threats of higher tariffs could tip the global economy into recession. While Japan has yet to reach a trade deal with the U.S., market jitters have calmed somewhat as Washington takes a more conciliatory tone in trade negotiations including with China. Some analysts say the BOJ may not be able to afford pausing rate hikes for too long due to inflationary pressure from stubbornly high food costs, particularly for Japan's staple rice. Japan's core inflation has exceeded the BOJ's 2% target for over three years and hit a more than two-year high of 3.5% in April due largely to a 7% spike in food prices. While Ueda has predicted a moderation in food inflation, he warns that persistent cost pressures could affect public perceptions of future price moves - signaling the BOJ's growing attention to the risk of too-high inflation. Japan was now experiencing a second round of food price inflation driven by supply shocks, which adds to inflationary momentum from higher wages, Ueda said. "Given that underlying inflation is closer to 2% than a few years ago, we need to be careful about how food price inflation will impact underlying inflation," he said a speech on May 27. "Through Ueda's speech comments, the BOJ appears to be fine-tuning its communication somewhat by flagging not just downside but upside risks" to growth and inflation, said Mari Iwashita, executive rates strategist at Nomura Securities.
