BOJ board split over JGB buying at June meeting
According to the minutes, one board member argued that there was "no reason at all to halt the reduction of the purchase amount" because the government bond market remained stable.
At the Bank of Japan's policy board meeting on June 15-16, there was disagreement among members regarding whether to cease reducing the government bond purchases. According to the meeting minutes, one board member argued that there was "no reason at all to halt the reduction of the purchase amount" as the government bond market remained stable.
This member cautioned that if market participants perceived the move as monetary financing, it "could undermine the credibility of the bank." However, the majority of board members believed that "it would take some time for investors in Japan, including banks and individual investors, to smoothly increase their JGB holdings," and continuing the present pace of reduction might have unforeseen impacts on market stability.
Some members emphasized the necessity of clearly explaining that stopping the reduction in bond purchase amount would be a measure to prevent JGB markets from becoming unstable, not to support government financing. During the meeting, a representative from the Cabinet Office urged the BOJ to "take appropriate action for market stability" concerning its JGB purchases.
The BOJ board ultimately decided by a seven-to-one margin to stop slowing the pace of JGB buying starting in April, with the dissenting member being Naoki Tamura.
Written by urgent.news from Japan Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
