BOJ to Slow Bond Market Withdrawal After Standing Pat on Rates

The Bank of Japan unveiled a plan to step back from the bond market at a slower pace from next year to ensure market stability while sticking to a path of normalization that includes the possibility of more rate hikes.

Governor Kazuo Ueda’s policy board stood pat on its benchmark policy rate of 0.5% at the end of a two-day meeting Tuesday. In a widely expected move the central bank said it would ease the pace of its cuts to monthly bond purchases from the next fiscal year to quarterly reductions of ¥200 billion ($1.34 billion) from the current ¥400 billion.