Takaichi Asks BOJ to Boost Bond Buying Amid Rate Concerns

Japanese Prime Minister Sanae Takaichi recently met with Bank of Japan Governor Kazuo Ueda to discuss monetary policy. During their meeting in May, Takaichi expressed concern about rising long-term interest rates and asked the BOJ to increase bond buying if necessary. The government has been trying to curb these rate increases, which they believe could be detrimental to the economy. Ueda replied that the BOJ would consider market reactions before making any decisions.

The BOJ had begun slowing its bond buying in July 2024 as part of a plan to wean the economy off massive stimulus and allow interest rates to rise naturally. However, in June, they decided to suspend this tapering process from April next year and continue buying roughly 2 trillion yen ($12.68 billion) in Japanese government bonds (JGB) each month.

In a research paper released on Tuesday, the BOJ analyzed its own bond purchases and concluded that their tapering has had only a limited effect on long-term interest rates.