Prime Minister Takaichi Urges Bank of Japan to Increase Bond Purchases

Japanese Prime Minister Sanae Takaichi requested that the Bank of Japan increase its purchase of government bonds to curb rising long-term interest rates during a May meeting with Governor Kazuo Ueda. Takaichi urged the central bank to take steps to stabilize markets, which led Ueda to state that the bank would act when circumstances required while remaining mindful of market reactions.

This request follows a shift in monetary policy where the Bank of Japan began slowing bond purchases in July 2024 to reduce economic stimulus. However, in June, the bank decided to suspend its taper process starting April of the following year, maintaining monthly purchases of approximately 2 trillion yen.

On August 5, the Bank of Japan released a research paper stating that its tapering of bond purchases likely had only a limited effect on pushing up long-term interest rates.