BOJ’s JGB buying hits 6-yr high in 2022

Jiji Press

13:04 JST, January 5, 2023

TOKYO (Jiji Press) — The Bank of Japan bought ¥111,060.7 billion in Japanese government bonds in money market operations in 2022, hitting a six-year high, the BOJ said Wednesday.

The central bank needed to boost its JGB purchases to implement its monetary policy of guiding 10-year JGB yields to around zero percent.

The BOJ frequently offers to buy unlimited amounts of long-term JGBs at fixed yields to hold down interest rates that are under increasing upward pressure following a series of interest rate hikes by U.S. and European central banks.

But the BOJ’s aggressive buying has sharply reduced the amount of bonds available on the market, leaving JGB trading extremely thin.

In response, the BOJ last month raised its cap on 10-year JGB yields to 0.5 % from 0.25 %.