by Junko Fujita
TOKYO (Reuters) – The Bank of Japan (BoJ) bought 1 trillion dollars (924.41 billion euros) in Japanese government bonds (JGB) over the past fiscal year, a record amount, against investor attacks on its ultra-low interest rate policy.
Net purchases of government bonds reached a record 135.989 billion yen (1.020 billion dollars or 943.14 billion euros) in the fiscal year which ended in March, almost twice the previous year’s amount, shows a BoJ report released on Monday.
“It will depend on the global environment but the BoJ could be forced to spend massive amounts again this year if yields come under upward pressure and investors resume their bets on a change in monetary policy,” Keisuke said. Tsuruta, at Mitsubishi UFJ Morgan Stanley Securities.
The central bank, which clashes in the context of monetary tightening by the largest institutions in the world, was forced into massive bond purchases to defend its policy of capping the yield of 10-year JGBs.
With Japanese inflation above the 2% target and corporate wages rising, investors expect a change in the BoJ’s yield curve control policy.
Speculation in this direction accelerated in December after the bank surprised the markets by tolerating a greater fluctuation in ten-year yields.
A sign that the BoJ could continue its aggressive purchases of bonds, it raised Friday the maximum amount of its purchases of government bonds planned for all maturities over the next three months.
(With Rocky Swift, Laetitia Volga, editing by Kate Entringer)
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