Japan’s record-buying spree of Australian bonds may cool off with the Reserve Bank of Australia mulling an expansion of its quantitative easing program.

Bond yields in Australia fell last week after RBA Governor Philip Lowe fanned expectations that the 10-year yield will be lowered to boost jobs. That could put a damper on Japanese demand after they bought ¥2.38 trillion ($22.6 billion) of Aussie sovereign bonds in the five months ended Aug. 31.

"The pace of inflow may not be able to be sustained at the very high levels we have been witnessing,” said Andrew Ticehurst, a rates strategist at Nomura Holdings Inc. in Sydney. "The absolute yield, the steepness of the curve and the ability to get carry and roll have been important for Japanese investors.”