MNI BRIEF: BOJ To Watch JGB Moves, Review Tapering - Ueda

The Bank of Japan is closely monitoring developments in the JGB market, including its overall functioning, amid growing concerns over worsening supply-demand dynamics, Governor Kazuo Ueda told lawmakers Friday.

The BOJ will conduct an interim assessment of its JGB tapering program at the June 16-17 policy meeting based on feedback from financial institutions and recent market conditions, he said.

JGBs have risen recently, reflecting concerns over deteriorating bond supply-demand conditions. Market participants have pointed to a decline in demand from major life insurers, typically buyers of longer-dated JGBs, who are now holding back due to heightened worries over unrealised losses.

Ueda also reiterated that the central bank will continue to manage the policy interest rate appropriately in line with evolving economic and financial conditions.

Ueda added that the BOJ would also take its time to address the disposal of its holdings exchange-traded fund holdings.