BOJ Board Divided Over JGB Buying Decision

The Bank of Japan's Policy Board was divided over whether to stop reducing its government bond purchases at its June meeting.

According to minutes released on August 5, one board member argued that there was 'no reason at all to halt the reduction of the purchase amount' because the JGB market remained stable. However, this member warned that if market participants interpreted the move as monetary financing, it could undermine the credibility of the Bank.

Most board members agreed with a different assessment, stating that halting the reduction would take time for investors to adapt and might have an unforeseen impact on market stability.

Some members noted the need to clearly explain that halting the reduction was aimed at preventing JGB markets from becoming unstable and not supporting government financing.