BOJ Says Market Is Satisfied With Current Bond-Buying Operations

Participants in Japan’s bond market see no need to change the central bank’s buying operations, which were increased last month amid a surge in volatility.

Market representatives said the purchases were being smoothly operated, a Bank of Japan official told reporters in Tokyo today, asking not to be named per the bank’s policy. The BOJ met with 57 people involved in the market for Japanese government bonds, the official said.

Today’s gathering marks the fourth between the BOJ and JGB market makers since Governor Haruhiko Kuroda announced unprecedented stimulus in April. After its last meeting with market participants, the BOJ said it would boost the frequency of JGB purchases from June to about 10 times per month from 8.

That’s helped quell volatility that surged after the BOJ doubled its monthly buying of government securities to more than 7 trillion yen ($70 billion). The benchmark 10-year JGB yield slid to 0.77 percent today, the lowest close since May 10. It had swung from a record low 0.315 percent to as much as 1 percent since April.

After meetings with market representatives that month, the BOJ revised its monthly bond purchases to “approximately 7+ trillion yen” per month from an earlier estimate of 7.5 trillion yen.

The central bank today carried out its eighth purchase of JGBs in July, offering to buy 950 billion yen of the securities.

Prime Minister Shinzo Abe has urged the BOJ to take steps to overcome 15 years of deflation and achieve 2 percent annual price gains in two years. He appointed Kuroda to replace Masaaki Shirakawa, who stepped down in March.

Kuroda has pledged to strengthen the central bank’s communication with the market. The official speaking today said the BOJ will hold meetings with market participants as needed.

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