BOJ cornered as Japanese banks running out of bonds to sell – BBG

Japan’s biggest banks are running out of room to sell their government bond holdings, pushing the central bank closer to the limits of its record monetary easing, Bloomberg reports.

Finding willing sellers is going to be a trouble for BOJ Governor Haruhiko Kuroda as the central bank gears up for the policy review at next month’s board meeting, amid growing concern that he has few tools left to revive the economy. 

Key Quotes:

“Japan Post Bank Co. and the nation’s three so-called megabanks have almost halved their sovereign bond holdings to 114 trillion yen ($1.1 trillion) since March 2013, the month before the Bank of Japan began buying the securities on an unprecedented scale to end deflation.”

“Government notes held by Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. are approaching the level where further reductions would involve securities they need as collateral.”