海外债市系列之五：海外央行购债史：日本央行篇

Report Industry Investment Rating No relevant content provided. Core Viewpoints - The report systematically analyzes the key stages of the Bank of Japan's bond - buying policy from its inception to the present, exploring the macro - economic background, policy goals, and evolution of bond - buying methods at each stage, and focusing on its impact on the direction, shape, and liquidity of the Japanese bond market's yield curve. The Bank of Japan's bond - buying behavior has evolved from a traditional tool for increasing money supply to a core and controversial means in global monetary policy operations [17]. Summary by Stages First Stage (1960s - 1980s): The Germination of Traditional Tools - Macro - background and Policy Goals: In the context of financial liberalization, facing issues such as international payment emergencies and domestic credit out - of - control, the Bank of Japan aimed to adjust money supply and smooth short - term liquidity fluctuations through open - market operations [18][19]. - Bond - buying Method: Initially, it mainly bought securities in the secondary market through open - market operations. After the expansion of the government bond market, it included long - term government bonds in open - market operations, with purchases starting one year after bond issuance. Sales operations also began in 1972 [20][21]. - Impact on the Bond Market: The bond trading of the Bank of Japan had an insignificant impact on the overall level and curve shape of government bond yields. Market interest rates were mainly determined by the official discount rate, strict financial control systems, and economic cycle changes such as the oil crisis [24]. Second Stage (1990 - 2000): Exploration after "Zero - Interest Rate" - Macro - background and Policy Goals: After the burst of the Japanese asset - price bubble in the 1990s, the economy entered the "Lost Decade." With the exhaustion of traditional interest - rate reduction space, the Bank of Japan gradually increased bond purchases to create a continuously loose monetary policy environment [27][30]. - Bond - buying Method: Besides reducing interest rates, it significantly increased bond - buying volume in the open market. In 1999, it introduced direct purchases of short - term treasury bills and government short - term securities [30][31]. - Impact on the Bond Market: Japanese government bond yields entered a long - term downward channel due to economic recession, deflation expectations, and continuous interest - rate cuts. The Bank of Japan's bond - buying behavior strengthened this trend, and this exploration accumulated experience for subsequent quantitative easing policies [32]. Third Stage (2001 - 2012): The First Appearance and Repeated Use of Quantitative Easing (QE) - Macro - background and Policy Goals: To counter the impact of the 2001 Internet bubble burst on the global economy and address economic recession and deflation pressure in Japan, the Bank of Japan adjusted its monetary policy framework and launched QE [37][38]. - Bond - buying Method: During the QE launch (2001 - 2005), it increased commercial bank reserve balances and promised to continue QE until the core CPI year - on - year growth rate stabilized above 0%. It also increased long - term government bond purchases multiple times. QE was briefly withdrawn in 2006 but restarted in 2008, with an expansion of the bond - buying scale and asset scope [39][41][42]. - Impact on the Bond Market: During the first QE period, long - term government bond yields initially declined rapidly but rebounded in 2003. After the QE restart in 2008, yields declined significantly again. Overall, the QE policy increased government bond demand, but it did not necessarily drive yields down continuously in the short term [45]. Fourth Stage (2013 - 2016): The Shock of "Quantitative and Qualitative Easing" (QQE) - Macro - background and Policy Goals: Under the framework of "Abenomics," QQE aimed to reverse deep - rooted deflation expectations and achieve a 2% inflation target within two years [49][50]. - Bond - buying Method: Compared with the QE period, QQE significantly increased the scale, variety, and duration of bond purchases. The annual government bond purchase amount increased from 50 trillion yen to 80 trillion yen, the average remaining maturity of purchased bonds was extended, and the purchase of risk assets such as ETFs and J - REITs was increased [51]. - Impact on the Bond Market: QQE quickly pushed Japanese medium - and long - term government bond yields to historical lows, flattening the yield curve. The Bank of Japan became the dominant buyer in the bond market, which led to a decline in secondary - market trading activity and impaired the price - discovery function of the government bond market [57]. Fifth Stage (2016 - 2023): The Fine - Tuning of Yield Curve Control (YCC) - Macro - background and Policy Goals: To address the side - effects of QQE, such as financial institution profit damage and policy sustainability issues, the Bank of Japan introduced the YCC framework to improve the flexibility and sustainability of monetary policy [60][61]. - Bond - buying Method: The YCC framework targeted a short - term policy rate of - 0.1% and a 10 - year government bond yield of around 0% with a fluctuation range of ±0.1%. The Bank of Japan would adjust bond - buying volume flexibly according to market conditions. The fluctuation range was gradually relaxed over time [62]. - Impact on the Bond Market: As the YCC fluctuation range widened, the fluctuation range of the 10 - year government bond yield increased, and the yield level gradually rose. The YCC policy achieved precise control over the 10 - year government bond yield, but the bond market lost some of its market - pricing function [68]. Sixth Stage (2024 - Present): Saying Goodbye to Unconventional Policies and Moving towards Normalization - Macro - background and Policy Goals: After the COVID - 19 pandemic, due to factors such as rising global commodity prices, yen depreciation, and wage increases, Japan's core CPI remained above 2%, providing conditions for the Bank of Japan to exit ultra - loose policies [71]. - Bond - buying Method: In March 2024, the Bank of Japan ended negative interest rates, exited the YCC policy, and stopped buying risk assets while maintaining government bond purchases. In July 2024, it announced a plan to gradually reduce bond - buying volume, with a slowdown in the reduction rate announced in June 2025 [73][74]. - Impact on the Bond Market: As the Bank of Japan's monetary policy returned to normal, government bond yields rose rapidly. The Bank of Japan's role changed from the "biggest buyer" to a "gradual seller," posing challenges to the market [80]. Overall Summary The Bank of Japan's bond - buying tools have evolved from simple liquidity adjustment to QE (emphasizing "quantity"), QQE (emphasizing "quantity" and "quality"), and YCC (emphasizing "price"), reflecting continuous innovation and adaptation to achieve monetary policy goals in different economic environments. The impact of QE on long - term government bond yields was not always one - way, while later QQE and YCC policies made the Bank of Japan a dominant participant in the bond market, with a more direct impact on bond market liquidity and yields [83][84].