Japan PM Takaichi Urges BOJ to Buy More Bonds Amid Rate Concerns

Ueda responded that the central bank would consider market reactions but would act when circumstances require. The Bank of Japan has been gradually slowing its bond purchases since July 2024 to reduce its market presence and stimulate economic activity. In June, the BOJ decided to suspend further tapering from April next year, maintaining monthly purchases of approximately 2 trillion yen ($12.68 billion) in Japanese government bonds (JGBs).

This decision was seen by some analysts as a response to concerns that the BOJ's reduced buying could be contributing to already increasing yields. The BOJ released a research paper suggesting that its tapering of bond purchases is likely having only a limited impact on pushing up long-term interest rates. Separately, minutes from a recent BOJ meeting revealed that some board members expect consumer inflation to significantly increase in the latter half of the current fiscal year due to planned price hikes. Two of the eight board members advocated for accelerated interest rate increases.