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06/17 14:09

BOJ keeps interest rate on hold, plans to cut bond

BOJ keeps interest rate on hold, plans to cut bond purchases

The BOJ kept its interest rate on hold at 0.5%, plans to cut bond purchases.

The bond-cutting plan was approved by an 8-1 vote.

Market impact on JPY volatility and global liquidity is expected.

The BOJ kept its interest rate on hold at 0.5% on June 17, 2025, in Tokyo, planning to gradually reduce its bond purchases. The decision is aimed at adjusting financial market conditions.

The BOJ’s decision marks an ongoing shift in its monetary policy with potential implications for financial markets, particularly affecting bond markets and liquidity.

BOJ keeps rates on hold, cuts bond purchases

The BOJ’s announcement to keep its interest rate on hold at 0.5% and gradually reduce its purchases of Japanese government bonds reflects an attempt to ease its intervention in financial markets.  The decision was made by Governor Kazuo Ueda and the Policy Council, and the bond reduction plan was approved by an 8-1 vote. As Governor Kazuo Ueda stated, “The Bank will encourage the overnight unsecured call rate to be around 0.5 percent. Regarding the reduction in the purchase of Japanese government bonds… The Bank will gradually reduce the volume of its monthly outright purchases.” Bank of Japan Monetary Policy Meeting Decision.

As part of its strategy, the bank plans to reduce its bond purchases by 200 billion yen each quarter starting in April 2026. The move is expected to reduce global liquidity, which could impact risky assets such as cryptocurrencies.

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