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The US-based Fitch ratings agency is out with its take on the Bank of Japan’s (BoJ) “stealth” tapering, with the key highlights found below.

“The pace of asset purchases by the Bank of Japan (BOJ) has continued to slow sharply in 2018 to an annual rate of around JPY45 trillion (USD410 billion) despite the official commitment to annual purchases of around JPY80 trillion.  

While BOJ monetary policy remains extremely accommodative and the scale of asset purchases is still large, this “stealth” tapering is occurring as the European Central Bank (ECB) has recently announced its intention to phase out QE by the end of this year, the Fed’s balance sheet shrinks at an increasing pace and the Bank of England (BOE) has lowered the threshold for interest rates above which it will start reducing its balance sheet.  

BOJ purchases are expected to continue to step down over the next few years.”