🇯🇵 The Bank of Japan keeps shrinking its balance sheet, adding to bond market pressure:
Bank of Japan total assets fell another ¥15.5 trillion (-$98 billion) in Q3, bringing the year-over-year decline to ¥70.8 trillion (-$445 billion).
Total assets on its balance sheet are now down to ¥625 trillion ($3.95 trillion), the lowest level since March 2020.
Since the Q1 2024 peak, the BOJ has shed ¥131 trillion, or -17.4% of its total assets, equivalent to ~$825 billion.
Japanese Government Bond holdings fell by ¥14.3 trillion in Q3 alone, the largest quarterly decline since QT began, down to ¥504 trillion, their lowest since 2020.
At the same time, the BOJ has raised its rates by 1.25% after its first hike in March 2024, suggesting QT has become a much more important tightening tool.
The impact is increasingly visible in long-term yields, with the 10-year JGB yield at 3.10%, its highest since 1996, and the 30-year yield at 4.21%, near the highest on record.
The BOJ continues pulling liquidity from the system.
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/CIG/ Telegram | Counter Intelligence Global 🇯🇵 The Bank of Japan finally increased the key interest rate from 1% to 1.25%, the highest such interest rate since 1995. The inflation rate in Japan is pushing towards 2% and the BOJ felt compelled to raise the cost of borrowing to keep the inflation rate…
