The Bank of Japan (BOJ) has announced its intention to taper bond buying at a slower pace, a decision driven by emerging economic uncertainties. This strategic adjustment reflects the BOJ's commitment to maintaining market stability amid rising geopolitical tensions and domestic inflationary pressures . By reducing its monthly government bond purchases by 200 billion yen per quarter, starting beyond April next year, the BOJ aims to mitigate potential disruptions in financial markets while navigating complex economic landscapes .
The Bank of Japan kept its interest rates steady on Tuesday and said it would slow the pace of reduction in its bond purchases next year, signalling a cautious approach to unwinding its decade-long monetary stimulus.
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.
Purchases will be cut in principle “by about 200 billion yen each calendar quarter from April-June 2026” — from around 400 billion yen ($2.8 billion) per quarter.
Carol Kong, an analyst at the Commonwealth Bank of Australia outlined the possible reasons for the decision ahead of the release of the BoJ policy statement.
“Slowing the bond taper will help keep interest rates lower than otherwise, providing support to the economy amid heightened trade uncertainty,” she told AFP.
Speculation of such a move “intensified after a surge in the ‘super long’ Japanese Government Bond (JGB) yields in recent months”, Kong added.
The survey also revealed shifting expectations for the BOJ’s next rate hike: January 2026 is now seen as the most likely timing, overtaking earlier bets on July or October. Goldman Sachs noted that the decision could hinge on global conditions, including U.S. tariff policy and automotive trade. Meanwhile, opinions remain divided on whether a U.S.-Japan trade agreement will be reached by the upcoming G7 summit.
The central bank ended yield curve control in 2024 and began tapering its massive asset purchases, aiming to halve monthly bond buying to ¥3 trillion by March 2026. Still, with inflation exceeding the 2% target and fresh economic headwinds looming, the pace of policy normalization remains delicate. Markets now await Ueda’s guidance on potential timing for the next rate hike.
Read more
OnePlus unveils the Nord 5 series, Buds 4, Pad Lite, and a new Watch Thunder one win away from first NBA title in 46 years after defeating PacersSara H
Also on site :
- Tankers Reportedly Ablaze Near Strait of Hormuz
- South Africa: 12 Killed in a Bus Accident Near Vryheid - South African News Briefs - June 17, 2025
- Industry-First! SpiroxLTS Reveals the True Quality of TGV Laser-Modified Vias Accelerating TGV Mass Production