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The Bank of Japan on Friday said it would trim its vast hoard of government bonds as it cautiously steps away from its long-running ultra-loose monetary policy.
The central bank kept interest rates unchanged after a two-day meeting but announced plans to “reduce its purchase amount of JGBs (Japanese Government Bonds) thereafter to ensure that long-term interest rates would be formed more freely”.
“A detailed plan” for the reduction “during the next one to two years or so” will be decided at the next policy meeting in July, it said.
While the move had been widely expected, observers said the decision to defer action until next month weighed on the yen, pushing it towards 158 per dollar, from around 157.
