BoJ: Some members said JGB market functionality improving as a trend due to BoJ’s taper

• Some members said JGB market functionality improving as a trend due to BoJ’s taper.
• Other participants said there is distortion between super-long yields and yields for other maturities due to dwindling liquidity in super-long JGB market.
• Some market participants called for faster pace of BoJ taper from fiscal 2026 though others called for maintaining or slowing pace.
• Opinions from market players included those wanting new taper plan to cover about two years, and others saying BoJ should lay out a 1-year plan then maintain that taper level thereafter.
• Opinions by market players on monthly BoJ bond buying amount at the end of new taper period ranged from zero, 1-2 trillion yen, and about 3 trillion yen.
• Opinions by market players included one calling for nimble response to sharp decline in liquidity for super-long JGBs such as termination of taper or increase in BoJ’s purchase amount.
• Others said worsening supply-demand for super-long JGBs is due to structural factor such as lack of investor demand, and not something BoJ can fix.

This article was written by Giuseppe Dellamotta at www.forexlive.com.