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MNI BRIEF: BOJ Has JGB Purchase Timetable Adjustment Options

TOKYO (MNI)

The Bank of Japan could try adjusting its monthly bond-buying schedule to inject some volatility into the longer-end of the curve is one option being discussed, but any change will only be after the economy is past its current weak patch, MNI understands.

The BOJ currently announces its calendar for JGB purchases in advance on a monthly basis to help smooth out operations. One way to add volatility -- and reduce the bank's presence in the JGB market whilst giving operations managers more flexibility -- is to adjust or even halt the release of the timetable, currently published on the last trading day of the month.

However, bank officials are aware of the risk that new decisions may be misinterpreted as policy tightening and will not adapt or adjust operational tools that could give that impression. JGBs have been under pressure in recent days and could soon test upside resistance at 0.1% (Mar 23 2020 high) and 0.125% (Oct 4 2018).


JGB 10-year yield Source: Bloomberg

MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com
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MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com
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