“BoJ’s JGB Holdings Skyrocket to Unprecedented Record in March – Experts Weigh In!”

As of March 31, the Bank of Japan’s (BoJ) holdings of Japanese government bonds (JGBs) stood at JPY582tn ($4.42tn), suggesting that the central bank’s bond portfolio may have reached “peak size.” Record purchases of JPY136tn were made in the year through March — nearly double the amount in the previous year. The increase in JGBs marks a milestone in Japan’s efforts to bolster its economy and move towards a 2% inflation target through aggressive monetary easing. However, the central bank’s bond-buying program currently adds about JPY180tn a year to the economy — causing analysts to worry about the decreasing availability of JGBs and the consequent effect on the bond market. Slowing inflation and the BoJ’s divergent monetary policy in comparison to the US and Europe will exacerbate the issue since they have sought to reduce the size of their balance sheets. BoJ Governor Haruhiko Kuroda has maintained confidence in ending the easing program though there is a strong chance that the central bank might be forced to review its policy before JGBs run dry.


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