From Yahoo Finance: 2025-06-04 06:08:00

The Bank of Japan is considering slowing bond purchases to avoid market disruptions. Some prefer maintaining the current pace, while others suggest cutting quarterly taper size to around 200 billion yen. A decision will be made at the June policy meeting. The BOJ began tapering last year to reduce its presence in the bond market.

Market players worry about vulnerability during market volatility as the BOJ continues tapering. The bank is expected to maintain or slightly slow tapering beyond April 2026, but specifics are unknown. The BOJ aims to ensure tapering plans do not destabilize markets, particularly after recent super-long bond sell-offs.

The BOJ is considering milder tapering, lagging behind global counterparts in stimulus reduction. It exited a decade-long stimulus last year and ended negative interest rates. The upcoming review may see monthly bond buying halved to 3 trillion yen by March 2026, with potential further reductions to around 2 trillion yen by March 2027.

Market participants suggest reducing monthly bond buying to 1-2 trillion yen, aligning with some BOJ staff preferences. The bank’s final decision on tapering will be influenced by these meetings. The new tapering program is expected to cover a one-year period ending in March 2027.

Read more: BOJ to consider slowing pace of bond tapering next year, sources say