BOJ Holds Rate at 0.5%, Sets JGB Taper Plan
The Bank of Japan unanimously decided to encourage the uncollateralized overnight call rate to remain at around 0.5%. 12
The monthly purchase amount of long-term JGBs will be reduced by about 400 billion yen per quarter from January–March 2026, and by about 200 billion yen per quarter from April–June 2026, reaching about 2 trillion yen in January–March 2027. The plan passed by 8 votes to 1. 12
Member Tamura dissented, submitting a proposal to reduce purchases by about 400 billion yen per quarter through January–March 2027, on the grounds that long-term rates should be left to the market. The proposal was rejected by majority vote. 12
Governor Ueda said an interim assessment of the new taper plan will be held at the June 2026 meeting, which will also consider the policy for JGB purchases from April 2027 onward. 1
The Bank judged that Japan's economy is recovering moderately, though some weakness is seen. Core CPI inflation is in the mid-3% range year on year. 12
The Bank also decided to expand the eligible issues under eased requirements for the reduction measures in the JGB securities lending facility, to improve JGB market liquidity. 1