The Bank of Japan, by a 7-1 vote, reviewed JGB market functioning and set its
future purchase approach: long-term rates should be market-determined;
predictable JGB purchases are appropriate, but the bank will retain flexibility
to support market stability. Policy actions: from now through Jan–Mar 2027 the
BOJ will, in principle, cut the monthly JGB purchase cap by about ¥200bn each
calendar quarter; from April 2027 the monthly cap will be maintained at about ¥2
trillion. If long-term yields rise rapidly, the BOJ said it would respond
flexibly — including increasing JGB purchases, conducting fixed-rate JGB
purchase operations (both potentially outside the monthly cap), and providing
funding operations secured by pooled collateral. The BOJ will not carry out a
mid-term review of its direct JGB purchase plan but said it stands ready to
adjust the pace of purchases at policy meetings if warranted by the bank’s basic
approach and market developments.
