The total amount of JGBs held by the Bank of Japan is likely to fall below Yen 50 trillion by the end of March, according to a report in the Nikkei newspaper in Tokyo.
This would be the first time for five years that the value of JGBs held by the central bank has fallen below Yen 50 trillion.
The total balance of the long-term JGBs held by Bank of Japan was Yen 51.7 trillion at the end of January 2007. It has decreased by Yen 15 trillion since August 2004.
“Market players see this would stabilize the long-term interest rate, as the Bank of Japan would have more room to purchase JGBs in their market operations,” says a spokesman for Mizuho Corporate Bank in Tokyo.