This unanimous decision reflects a balance between global economic uncertainties and domestic inflationary pressures. The BoJ plans to reduce its government bond (JGB) purchases by 400 billion yen per quarter until March 2026, bringing monthly total purchases to around 3 trillion yen. From April 2026 onward, it will cut the quarterly reduction pace by half, to 200 billion yen, aiming for approximately 2 trillion yen in purchases by March 2027. 

Miki Den, a strategist at SMBC Nikko Securities, stated that reducing purchases for bonds with maturities up to 10 years shows the BoJ’s intent to let the market determine yields, while continuing purchases for super-long-term bonds based on market balance. This strategy is seen as a balancing tactic to prevent a rapid rise in long-term yields. 

Den commented:
“Reducing bond purchases up to 10-year maturities shows the BoJ wants the market to determine yields, while maintaining purchase levels for super-long bonds reflects a response to supply and demand dynamics.” 

Bank of Japan Governor Kazuo Ueda emphasized the importance of clear communication in policy decisions. He noted that future rate hikes would depend on economic data, particularly inflation trends. Ueda also stated that the BoJ will remain flexible in response to global trade uncertainties, U.S. tariffs, and geopolitical developments in the Middle East. The central bank is trying to balance rising domestic inflation expectations with potential risks posed by Donald Trump’s tariff policies. 

The Nikkei 225 Index showed a muted reaction, reflecting that the BoJ’s decision was largely anticipated. This indicates that while the BoJ maintains its interest rate policy, it is shaping its asset purchase strategy sensitively to external conditions. 

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