After the rise in volatility, the Bank of Japan will consider slowing down its bond purchasing pace.

Gate News bot message, the Bank of Japan will consider whether to reduce the bond purchase scale at a slower pace while keeping the benchmark interest rate unchanged, and this decision will be closely followed by the bond market.

All 53 surveyed observers of the Bank of Japan expect that the central bank's interest rate of 0.5% will remain unchanged at the conclusion of the two-day meeting that ends on Tuesday. The focus will be on the Bank of Japan's latest plan to reduce its government bond purchase scale in order to minimize market influence. About two-thirds of respondents expect that the reduction will be lower than the current level starting from April.

(Source: Bloomberg)

This meeting will have an impact on the global bond market. The board led by Bank of Japan Governor Kazuo Ueda has extended its quantitative tightening plan into the next fiscal year for the first time, indicating its view on the recent yield fluctuations. Last month, the ultra-long-term Japanese government bond yield hit a historical high, and Japan is seen as one of the sources of turmoil in the global bond market.

The Bank of Japan abolished its negative interest rate and yield curve control program in March last year and began to reduce the scale of bond purchases last summer. Central Bank data shows that due to the slowdown in purchase pace and debt maturities, the government bonds held by the Bank of Japan saw a record reduction of 6.2 trillion yen in the first quarter.

Even so, after more than a decade of implementing large-scale monetary easing policies, the Bank of Japan still holds about half of the outstanding government bonds, which forces traders to scrutinize every action it takes.

Source: Bloomberg