BOJ Confirms Slower Bond Tapering Schedule

The Bank of Japan (BOJ) has decided to keep its benchmark interest rate at 0.5% and will slow the pace of its government bond purchases from April 2026, responding to market volatility and economic uncertainty. The BOJ will maintain quarterly reductions of 400 billion yen in bond purchases until March 2026, then halve the cuts to 200 billion yen per quarter through March 2027, targeting monthly purchases of about 2 trillion yen. An interim review of this tapering strategy is scheduled for June 2026 to ensure market stability. Persistent inflation, partly due to food price spikes and a rice shortage, has kept price growth above the BOJ's 2% target for over three years. Governor Kazuo Ueda said further rate hikes are possible if inflation shows signs of sustained progress toward the target. The BOJ's approach reflects caution amid recent surges in super-long bond yields and global risks, including rising U.S. tariffs.