Bank of Japan Seen Considering New Policy Steps as Bond Buying Nears Limit
- BOJ's bond holdings climb to 28.5% of all outstanding notes
- Lack of bond sellers ``will be critical'' for policy: RBS
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The global economic slowdown that prompted the Federal Reserve to delay an interest rate increase is also adding pressure on the Bank of Japan to boost stimulus, and it may need to consider new measures as sovereign note purchases near their limit, analysts say.
The BOJ may start buying debt issued by local governments and notes to fund government projects, according to UBS Group AG and JPMorgan Chase & Co. Outstanding issuance of those bonds total 58 trillion yen ($482 billion) and 69 trillion yen respectively, according to UBS calculations. Financial firms including banks can only sell so many sovereign notes to the central bank because they need to keep some debt to meet collateral requirements, among other reasons.