BOJ Told to Buy More Bonds as Japan Seeks to Stabilize Markets

Japanese Prime Minister Sanae Takaichi has asked the Bank of Japan (BOJ) to buy more government bonds when necessary to curb rises in long-term interest rates, according to Jiji news agency.

The request was made during a meeting with BOJ Governor Kazuo Ueda in May, where Takaichi called on the central bank to take 'appropriate steps to stabilise markets' and increase bond buying if needed.

Ueda replied that the BOJ needs to consider the market reaction to such measures, but will respond when circumstances require it, Jiji reported. The BOJ has been gradually slowing its bond buying since July 2024 as part of a plan to wean the economy off massive stimulus and breathe life back into a market made dormant by its huge presence.

In June, the central bank decided to suspend the taper process from April next year and keep buying roughly 2 trillion yen ($12.68 billion) in Japanese government bonds (JGB) each month, highlighting its sensitivity to government concerns about rising yields.