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BOJ cuts bond purchases as long-term interest rates rise to 0.940%

TOKYOMay 14 (News On Japan) – The Bank of Japan (BOJ) announced on May 13 that it will reduce the amount of its bond purchases, pushing long-term interest rates to a six-month high.

As part of its massive monetary easing measures, the BOJ has been buying about 6 trillion yen worth of government bonds every month to keep long-term interest rates low. However, on May 13, the BOJ announced a 50 billion yen reduction in the purchase amount for certain bonds.

This is the first time the BOJ has cut its bond purchases since ending negative rates in March.

After the announcement, long-term bond yields, a key market indicator, temporarily rose to 0.940%, hitting a six-month high.

The BOJ’s reduction in bond purchases led to a sell-off in the bond market, pushing yields higher.

Market observers suggest the BoJ’s move to reduce bond purchases could be aimed at addressing the yen’s historic depreciation by narrowing the interest rate spread between Japan and the United States.

Source: TBS

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