BOJ Set to Make Progress on Balance Sheet Cuts With CPs at Zero

The Bank of Japan is set to hit a milestone in its quest to shrink its massive balance sheet, as its commercial paper holdings head toward zero.

The outstanding amount of CPs on the central bank’s books has dropped to ¥29.9 billion ($196 million) as of Jan. 20, according to BOJ data last week. It could hit zero in the coming weeks, as what remains is about a quarter of the size of the average monthly decline over the past year, according to Bloomberg calculations based on BOJ data.