BOJ Seen Boosting JGB Buying for Market Stability

Tokyo, April 7 (Jiji Press)--The Bank of Japan plans to boost its purchases of outstanding Japanese government bonds in a bid to secure market stability amid the coronavirus crisis, informed sources said Tuesday. The government's emergency economic stimulus package worth a record 108 trillion yen, adopted at an extraordinary cabinet meeting Tuesday, will be financed by the issuance of additional JGBs. This may lead to a spike in long-term interest rates in Japan. Therefore, the BOJ plans to step up its JGB purchases in order to prevent a sharp rise in long-term interest rates and work with the Japanese government so that the stimulus package will generate maximum effects, the sources said. The BOJ said Tuesday that its JGB holdings stood at some 485.9 trillion yen as of the end of March, hitting a record high on a fiscal year-end basis. As part of its additional monetary easing measures announced on March 16, the BOJ vowed to buy JGBs aggressively. In April, the BOJ has increased the frequency of its planned purchases of JGBs with a remaining maturity of up to 10 years by one to two occasions from the previous month. Depending on the course of the economy and market developments, the BOJ may decide to increase its JGB buying further, the sources said. END