The Bank of Japan posted on Monday its latest minutes from the "Bond Market Group" meeting. In the summary, it was noted that, given the recent developments in the Japanese government bond (JGB) market, some believe the pace of the reduction of bond purchases should be changed "to a more gradual one," as the reduction could "have an adverse impact on market liquidity."
When it comes to recent trends in the JGB market, it was said that in the medium- to long-term zone, "supply and demand conditions have been tight, because investors, such as domestic banks, have been purchasing bonds in this zone since the beginning of this fiscal year." Meanwhile, in the super-long-term zone, "supply and demand conditions deteriorated markedly, and interest rates rose significantly."
