Takaichi Asks BOJ to Boost Bond Buying Amid Rising Interest Rates

Japanese Prime Minister Sanae Takaichi has asked the Bank of Japan (BOJ) to buy more government bonds when necessary, according to a report by Jiji news agency. The request was made during a meeting between Takaichi and BOJ Governor Kazuo Ueda in May.

Takaichi called on Ueda to take 'appropriate steps to stabilise markets' and increase bond buying if needed, citing unnamed sources. Ueda replied that the BOJ needs to consider market reaction to such measures but will respond when circumstances require.

The request comes as the BOJ has been slowing its bond buying since July 2024 in an effort 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.

The BOJ's sensitivity to government concerns was highlighted in a research paper released on Tuesday, which said its tapering of bond purchases is probably having only a limited effect in pushing up long-term interest rates.