It was the first such move since the BOJ launched its unprecedented monetary easing in
The BOJ has purchased massive amounts of Japanese government bonds and other financial assets from banks, aiming to inject sufficient money into the economy to raise the country's inflation rate to 2 percent.
But in its announcements on
The adjustments were specifically aimed at the central bank buying fewer government bonds with residual maturity of more than 10 years.
With the decision, the BOJ is apparently aiming to make it easier to control the average residual maturity of its overall bond holdings, targeting about seven years.
However, participants in the domestic sovereign debt market said such repeated adjustments are rare as they sought to figure out what the bank really intends.
"It is highly possible that the BOJ was increasing its caution against debt monetization" given that many people are saying the country's pension fund should overhaul its investment strategy while selling part of its huge bond holdings to the BOJ, Yamawaki said in his report.
Lawmakers and economists endorsing the GPIF's proposed allocation review say the central bank could be a buyer of bonds the fund would unload -- a proposal apparently causing chagrin among BOJ officials who traditionally believe monetizing government debt would only do harm to economic and financial stability.
Kuroda has repeatedly stated the BOJ will not hesitate to make any necessary adjustments to its monetary policy if downward risks to inflation materialize, signaling the bank may further ease monetary conditions to facilitate Abe's policy.
In its latest decision at the
The repeated tweaks to reduce the BOJ's purchases of government bonds with longer remaining maturity fall short of offering any evidence that the bank is about to taper its quantitative monetary easing, as is being done by the U.S. Federal Reserve, because the changes also involved steps to increase the purchases of bonds with shorter residual maturity, namely up to 1 year.
In addition, the BOJ has maintained the policy of buying Japanese government bonds from financial institutions at a pace that will increase its outstanding amount of holdings by about
Still, the latest adjustments to the buying program are expected to reduce the BOJ's exposure to ultralong-term government bonds, causing upward pressure on interest rates on 30- or 40-year debt in a development that may be seen contradictory to the bank's promise of a strong commitment to suppressing the yields of the entire range of sovereign debt.
"We are facing growing uncertainty over the outright purchases" of bonds by the BOJ, a dealer working for a foreign bank in
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