BoJ is releasing briefing material from its meeting with bond market participants; received various views from participants in the survey incl. the idea to reduce monthly buying to JPY 2-3tln or have it at around JPY 4tln

Width

• Should be reduced to 0 as soon as possible.
• Reduced to JPY 1-2tln/month before going further.
• Reduction to c. JPY 2-3tln/month is desired.
• Given investor holding power, JPY 3tln/month is desired.
• Domestic bank purchase needs are limited, JPY 4tln/month is desired.

Pace

• Rapid reduction, then a gradual one to offset concern and prevent volatility.
• Step-by-step reduction pace.
• Plan reductions over c. 2 years, to avoid unnecessary volatility.
• Opinions from bond market participants on the pace of tapering incl. the idea to taper at a set pace swiftly, taper swiftly and then moderately in several stages, or reduce buying gradually over two years.

Reduction Guidance

• Maintain flexibility by showing purchase amounts in a range for the quarter.
• Fixed value guidance could spark volatility.
• Show purchase plans via maturity for a two year ahead period.

Remaining Maturity Timeframe

• Focus on short-to-mid term, to reduce volatility.
• Priorities reduction in zones under 10yrs.
• Prioritise ultra-long to reduce duration.

Other

• Consider selling existing bonds alongside reducing purchases.