Japan Banks Cut Bonds, Keep Cash on Negative Rates

Updated on
  • Banks’ JGB holdings drop 5.5% in April, as reserves rise 3.4%
  • Weak demand means ‘no one to lend to,’ says NLI Research

The Japanese national flag flies outside the Bank of Japan headquarters in Tokyo, Japan, on Friday, Dec. 19, 2014. The Bank of Japan maintained unprecedented stimulus, as Governor Haruhiko Kuroda's bid to stoke inflation faces increasing challenges from the tumble in oil prices.

Photographer: Kiyoshi Ota/Bloomberg

Negative interest-rate stimulus is half working in Japan, as lenders cut government bond holdings by the most in almost three years, only to hoard proceeds at the central bank.

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