The Bank of Japan. Yonhap News【Financial News Tokyo=Reporter Soyeon Park】, ‘The Bank of Japan, the central bank of Japan, has reduced its purchase of long-term government bonds as the yen’s weakness continues.’,
, “According to local public broadcaster NHK and the Nihon Keizai Shimbun, the Bank of Japan announced on the 13th that it plans to purchase approximately 425 billion yen (about 3.7299 trillion won) of government bonds with remaining maturities of ‘5 years or more and less than 10 years.'”,
, ‘The announced amount is 500 billion yen (about 438.8 billion won) less than the 475 billion yen (about 4.1 trillion won) of government bonds announced by the Bank of Japan on April 24.’,
, ‘This is the first time the Bank of Japan has reduced its purchase of government bonds since deciding to end its negative interest rate policy in March and transition to a large-scale financial easing policy.’,
, ‘Although the Bank of Japan decided to continue purchasing government bonds at its policy decision meeting last month, Bank of Japan Governor Kuroda Haruhiko stated on the 8th of this month that it is appropriate to reduce the purchase of government bonds as part of the exit strategy for the large-scale financial easing policy.’,
, ‘Government bonds are one of the open market operations tools that central banks use for monetary policy. When a central bank purchases government bonds, the purchase amount is circulated in the market, increasing the money supply. An increase in the money supply leads to a decrease in interest rates.’,
, ‘NHK interpreted, “If the Bank of Japan reduces its purchase of government bonds, interest rates typically rise,” and stated, “As a result, it is expected that the yen will strengthen in the currency market due to the opinion that the value of the yen will rise.”‘,
, ‘Market participants expressed their views on the announcement of the reduction in the Bank of Japan’s purchase of government bonds, saying, “It is seen as a response to the weakening yen and an attempt to accelerate the normalization of financial policy.”‘,
, ‘On this day, the 10-year government bond yield, a key long-term interest rate indicator, rose to 0.940%, recording the highest level in six months since November last year.’,
, ‘The yen to dollar exchange rate was in the 140 yen range as recently as January 2nd this year, but it has steadily trended upward, breaking 160 yen last month for the first time in 34 years and currently trading in the mid-155 yen range.\n’]