At the end of September, BOJ maintains record 54% stake in JGBs

The Bank of Japan has disclosed that it held a record 53.86% of outstanding Japanese government bonds at the end of September, as per the latest quarterly report released on Wednesday. The central bank continued its purchases of JGBs in an effort to prevent long-term interest rates from rising, despite having raised its cap on 10-year JGB yields from 0.5% to 1% in July. This move reflects the BOJ’s ongoing commitment to maintaining stability in the bond market.

The total amount of outstanding JGBs, excluding treasury discount bills, was reported at ¥1,066 trillion as of September 30, with the bank holding a substantial ¥574 trillion of this total. Interestingly, the BOJ’s holdings of JGBs saw a slight decrease from the end of June, attributable to price drops in the government debt securities.

Alongside this information, the funds flow report also revealed that the balance of financial assets held by households reached a record high for the fourth consecutive quarter, growing by 5% from the previous year to ¥2,121 trillion as of September. This increase was influenced by higher stock prices, partly attributed to strong earnings from export-oriented companies as a result of a more competitive yen in the foreign exchange market.

The breakdown of the household financial assets showed notable growth in various categories, with cash and deposits rising by 1.2% to ¥1,113 trillion, shares by 30.4% to ¥273 trillion, and investment trusts by 17.4% to ¥101 trillion. These figures underscore the growing confidence and willingness of Japanese households to invest in various financial instruments, particularly in the stock market.

In addition to households, nonfinancial companies also saw a significant uptick in their financial assets, with a 9.5% increase to reach a record ¥1,449 trillion. This trend demonstrates a broader improvement in the overall financial landscape, signaling growing optimism and financial stability among both households and businesses in the country.

Overall, the latest data released by the Bank of Japan paints a picture of resilience and growth in the Japanese economy, particularly in terms of the bond market and household financial assets. Despite the challenges posed by the global economic environment, the central bank’s efforts have contributed to sustaining stability and fostering positive growth in these key areas. As Japan continues to navigate through the complexities of the post-pandemic world, these developments could play a crucial role in driving economic recovery and promoting financial well-being for both individuals and businesses in the country.


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