BOJ Holds Record 53.34% of Outstanding JGBs

Jiji Press

11:03 JST, June 28, 2023

TOKYO (Jiji Press) — The Bank of Japan held a record 53.34% of outstanding Japanese government bonds at the end of March, the central bank said Tuesday.

The result came as the BOJ stepped up its JGB purchases in a bid to curb rises in interest rates reflecting continued JGB sales on the bond market even after a hike in the upper limit set by the BOJ for 10-year JGB yields in December last year.

As of March 31, the BOJ owned ¥576 trillion out of the ¥1,080 trillion of outstanding JGBs, excluding treasury discount bills, according to the bank’s report on fund flows for January-March. The proportion of outstanding JGBs held by the BOJ exceeded 50% for the third straight quarter.

Under its massive easing policy, the BOJ continues to guide 10-year JGB yields to around 0% while tolerating the yields fluctuating between around minus 0.5% and plus 0.5%. JGBs came under heavy selling in January amid growing speculation that the central bank would revise its monetary policy.

The flow of funds data also showed that the balance of financial assets held by households at the end of March grew 1.1% from a year before to a record ¥2,043 trillion.

Of the total, cash and deposits increased 1.7%to ¥1,107 trillion. Shareholdings were up 2.7% at ¥226 trillion on the back of rising stock prices both at home and abroad. The balances were highest on a fiscal year-end basis.

In contrast, investment trusts fell 0.6% to ¥90 trillion.

Nonfinancial companies’ financial assets were up 5.3% at a record ¥1,383 trillion, including ¥389 trillion in shareholdings, up 3.5%.