Latest news with #tapering
Japan Times
22-05-2025
- Business
- Japan Times
BOJ dove Noguchi sees no need to change JGB tapering plan
A noted dove on the Bank of Japan's policy board said there's no need to make major changes to the bank's plan for tapering bond purchases, a remark that comes a month before authorities unveil guidelines for bond buying in the period beyond April 2026. "It is unnecessary at this point to make any major changes to the current plan,' BOJ board member Asahi Noguchi said Thursday in a speech in Miyazaki Prefecture. "The bank will need to examine the reduction plan for April 2026 onward from a longer-term perspective.' Noguchi spoke a day after the central bank concluded a series of hearings with market participants that will help it determine how fast to wind down its purchases at a time when concerns in the market have led to yield spikes, particularly among longer tenors. The BOJ will update its plans at a board meeting ending June 17. The BOJ is currently trimming its purchases by ¥400 billion ($2.8 billion) a quarter and is on course to reach monthly buying of around ¥2.9 trillion by the spring of 2026. In the speech, Noguchi conveyed calm regarding a rise in yields two months ago, when 10-year Japanese government bond yields rose to near 1.6% in March, saying "this rise — albeit rapid — cannot be regarded as disruptive, as it seems to have mainly reflected expectations among market participants of a higher terminal policy rate.' The current reduction plan, announced in July 2024, means that there will be no policy-driven changes in the BOJ's purchases of Japanese government bonds since the formation of long-term interest rates is left to the market, Noguchi said. At the same time, it "allows for making flexible changes to the amount of JGB purchases in the case of sudden market swings,' he said. "Even though recovery in market functioning is important, this would be meaningless if it ended up fostering or disregarding market turmoil.' Noguchi, who voted in favor of the January interest rate hike to around 0.5% after opposing two previous moves, signaled caution over the future policy path partly given rising downside risks stemming from the global trade war. The U.S. faces an "acute increase' in concerns over potential stagflation due to its tariff measures, he said. Amid high uncertainties, he added, the BOJ's terminal policy rate should not be predetermined based on factors such as the estimated neutral interest rate and the bank should examine carefully the impact of each of its rate hikes. "I believe that the necessary approach to the future conduct of monetary policy is cautious optimism, keeping a firm eye on growing overseas risks while calmly assessing how the situation unfolds,' he said. Noguchi spoke as risks are on the rise that Japan's economy may fall into a technical recession following a contraction in the first quarter. April trade data, released on Wednesday, showed that President Donald Trump's tariffs, especially a 25% levy on autos, started hitting Japan's exports, a key pillar of growth. At the same time, inflation is sticky. Data on Friday is expected to show that gains by consumer prices excluding fresh food accelerated in April to 3.4%, the fastest clip in two years. That would extend the streak at or above the BOJ's target to three years. Noguchi said data indicate progress toward reaching the BOJ's target, but the goal hasn't yet been met.
Bloomberg
21-05-2025
- Business
- Bloomberg
‘Buyers Strike' in Japanese Bonds Sends Warning Note to BOJ on Tapering
Japan's sovereign debt market is flashing a warning to the central bank that dialing back its bond purchases needs to be done with great care. The issue is in sharp relief this week, with investors shunning an auction of government debt and yields soaring, just as market participants sit down with Bank of Japan officials to share views on tapering. Comments from Prime Minister Shigeru Ishiba likening Japan's financial position to that of Greece underscore the stakes for avoiding any missteps in fiscal and monetary policy.
Yahoo
20-05-2025
- Business
- Yahoo
BOJ urged to boost bond buying in wake of spike in super-long yields
By Leika Kihara TOKYO (Reuters) -Some market players urged the Bank of Japan to increase buying of super-long bonds, or terminate tapering for that maturity, in the wake of sharp rises in their yields, the central bank said on Tuesday. The requests, made in the BOJ's survey of bond market participants on its taper plans, underscore the challenge the central bank faces in removing remnants of its massive monetary stimulus. "Market liquidity for super-long bonds has declined sharply, so the BOJ should consider responding nimbly, such as by halting taper, increasing the amount it buys," or tweaking the distribution of bonds it buys, the central bank quoted one participant as saying in its survey summary. The yields on super-long Japanese government bonds (JGB) soared to all-time highs on Tuesday on weak investor demand, as political calls for big fiscal spending flare up ahead of an upper house election slated for July. The spike in yields comes at a delicate time for the BOJ, which will review next month an existing taper programme running through March, and come up with a plan for next fiscal year and beyond. In the survey, most market participants saw no need to tweak the BOJ's existing taper programme. They were divided on the desirable pace of tapering from fiscal year 2026, with some calling for the bank to eventually stop buying JGBs altogether, while others said it should continue to buy up to 3 trillion yen ($20.77 billion) per month. But most opinions called for maintaining or slightly slowing the pace of tapering, the summary showed, heightening the chance the BOJ will proceed slowly in reducing its huge balance sheet. Under the current plan laid out last year, the BOJ has been slowing bond purchases by around 400 billion yen per quarter to halve monthly buying to 3 trillion yen by March 2026 - a pace that will diminish its $3.9 trillion balance sheet by up to 8%. "Taking into account the risk of supply-demand conditions worsening in times of market instability, the BOJ should cut its quarterly taper size to around 200 billion yen," one survey respondent said. The findings from the survey were released as part of briefing materials the BOJ prepared for a two-day meeting with bond market participants that kicked off on Tuesday. The survey and the outcome of the meeting will be taken into account when the BOJ reviews its quantitative tightening plan at its next policy meeting on June 16-17. The BOJ has lagged well behind its global counterparts in whittling down crisis-era stimulus, having only exited last year a decade-long, massive stimulus aimed at pulling the economy out of stagnation. It also ended negative interest rates last year, though short-term borrowing costs are still stuck at 0.5%. While the BOJ also began tapering its huge bond buying last year, it still owns roughly half of outstanding JGBs. ($1 = 144.4400 yen) 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
CNA
20-05-2025
- Business
- CNA
Some market players urge BOJ to buy more super-long JGBs
TOKYO :Some bond market participants urged the Bank of Japan to boost buying of super-long bonds, or terminate tapering for that maturity, in the wake of sharp rises in their yields, a summary of opinions collected by the central bank showed on Tuesday. They were divided on the desirable pace of the BOJ's bond tapering from fiscal 2026 onward, with some calling for the bank to eventually stop buying Japanese government bonds (JGB) altogether, while others said it should continue to buy up to 3 trillion yen ($20.77 billion) per month. "Market liquidity for super-long JGBs has declined sharply, so the BOJ should consider responding nimbly, such as by halting taper, increasing the amount it buys," or tweaking the distribution of JGBs it buys, an opinion quoted in the summary showed. The request was made in a survey the BOJ conducted of bond market participants to collect their views on an existing taper plan running through March, and how the bank should slow its bond buying thereafter. The BOJ will take into account the findings from the survey at its policy meeting on June 16-17, when it will review the existing taper plan and come up with a programme for fiscal 2026 onward. ($1 = 144.4400 yen)
Reuters
20-05-2025
- Business
- Reuters
Some market players urge BOJ to buy more super-long JGBs
TOKYO, May 20 (Reuters) - Some bond market participants urged the Bank of Japan to boost buying of super-long bonds, or terminate tapering for that maturity, in the wake of sharp rises in their yields, a summary of opinions collected by the central bank showed on Tuesday. They were divided on the desirable pace of the BOJ's bond tapering from fiscal 2026 onward, with some calling for the bank to eventually stop buying Japanese government bonds (JGB) altogether, while others said it should continue to buy up to 3 trillion yen ($20.77 billion) per month. "Market liquidity for super-long JGBs has declined sharply, so the BOJ should consider responding nimbly, such as by halting taper, increasing the amount it buys," or tweaking the distribution of JGBs it buys, an opinion quoted in the summary showed. The request was made in a survey the BOJ conducted of bond market participants to collect their views on an existing taper plan running through March, and how the bank should slow its bond buying thereafter. The BOJ will take into account the findings from the survey at its policy meeting on June 16-17, when it will review the existing taper plan and come up with a programme for fiscal 2026 onward. ($1 = 144.4400 yen)
