TOKYO -- The Bank of Japan's books showed it holding more than 100% of four benchmark 10-year government bond issues as of last Friday, according to a report released by the central bank on Tuesday.
This extremely rare accounting situation reflects the BOJ's even larger scale buying of the bonds that took place following sharp rises in their yields on expectations that a modification of the extremely loose monetary policy would invite aggressive sales. With no supplemental sales planned for most of these benchmark issues, it is feared that the JGB market's functionality will deteriorate on a long-term basis.
