Moving again to increase monetary liquidity, the Bank of Japan said Tuesday that it will begin publishing the issue-by-issue balances of its outstanding government bond holdings once a month.
In another move, the central bank posted information regarding its holdings of 10-year and 20-year bonds on its Internet Web site.
The move had been sought by market players, who told BOJ officials during a November meeting that such information would allow them to estimate the overall tradable volume of bonds.
In turn, they said, this would help prevent players from trying to squeeze the market by refusing to sell and thus raise bond prices right before their issue.
“We believe that securing greater transparency (regarding the bond holdings) will help enhance market liquidity,” Atsushi Miyanoya, head of the BOJ’s Open Market Operations Division, said Tuesday.
The central bank recently expanded its regular market operations to include two-, four-, five- and six-year government notes to pump liquidity into the banking system. This is in addition to short-term securities and 10- and 20-year government bonds, which conventionally have been targets of its open market purchases.
On the evening of the business day following the settlement of the first outright purchases of bonds each month, the BOJ will release the volume of bonds it holds through outright purchases and those rolled over for matured government bonds.
The BOJ usually buys outright about 400 billion yen of bonds every month in two installments from the money market.
As of May 1, the central bank held about 42.2 trillion yen in government bonds — 35.6 trillion yen in 10-year bonds and 6.6 trillion yen in 20-year bonds.
The bank also revealed new steps to ensure smooth money market operations involving government bonds, including penalties against parties that fail to transfer relevant government securities to the BOJ.
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