By SHINYA TOKUSHIMA/ Staff Writer
April 4, 2023 at 15:13 JST
The Bank of Japan’s head office in Tokyo (Asahi Shimbun file photo)
The Bank of Japan bought a record 135 trillion yen ($1 trillion) in government bonds in fiscal 2022 as it tried to contain long-term interest rates amid global rate increases.
The central bank’s government bond purchases nearly doubled from the previous year to 135.989 trillion yen in the year through March 2023, BOJ statistics showed on April 3.
During the period, U.S. and European central banks raised interest rates to tame inflation, putting Japanese long-term interest rates under upward pressure.
The BOJ purchased government bonds to keep interest rates low and maintain its ultra-loose monetary policy.
Still, interest rates continued to rise, forcing the BOJ to raise the target ceiling for the yield on 10-year government bonds, a benchmark long-term interest rate, from about 0.25 percent to about 0.5 percent in December 2022.
The change prompted speculation that the BOJ might further adjust its monetary easing policy. Investors sold government bonds, leading to a spike in interest rates.
The BOJ was forced to buy large amounts of government bonds, with the value of purchases in January exceeding 23 trillion yen, an all-time monthly high.
The bond purchases, which stood at about 21 trillion yen in fiscal 2012, sharply rose after the central bank embarked on large-scale monetary easing policy in April 2013 under Governor Haruhiko Kuroda.
The BOJ owned more than 50 percent of outstanding Japanese governments bonds as of the end of 2022. Critics say the central bank is effectively financing the government’s funding requirements.
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