The Bank of Japan may need to reduce the pace of its bond purchases in a few years due to a shortage of sellers, said economists at the International Monetary Fund.

There is likely to be a "minimum" level of demand for Japanese government bonds from banks, pension funds, and insurance companies due to collateral needs, asset allocation targets, and asset-liability management requirements, said IMF economists Serkan Arslanalp and Dennis Botman.

"The sustainability of the BOJ's current pace of JGB purchases may become an issue," they wrote in the paper released on Monday in Washington.