The Bank of Japan (BOJ) has reduced purchases of the Japanese government bonds (JGBs) maturing in five to ten years for the first time since December 2018 in order to put a floor under the sliding yields.
In today’s routine operation, the BOJ will be buying bonds worth JPY 450 billion, down from the previous purchase of JPY 480 billion.
The move to reduce bond purchases by JPY 30 billion comes after Japan’s 10-year yield fell to -0.25%, the lowest level since July 2016. With the drop to three-year lows, the benchmark yield slipped well below the -0.2% mark perceived by markets as the central bank’s line in the sand.
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