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BOJ's buying power faces limits in fight against bond vigilantes

Central bank's ownership exceeded 100% of instruments issued

BOJ Gov. Haruhiko Kuroda has pledged to maintain the yield curve control policy despite aggressive short selling by foreigners.   © Kyodo

TOKYO -- As the Bank of Japan pushes back against foreign speculators shorting government bonds, it is having to buy up almost all newly issued 10-year instruments to keep the benchmark yield within its target range, raising questions about the current easing policy.

The shocking figure was announced on Nov. 2. The BOJ's holdings of the 368th issuance of 10-year Japanese government bonds as of the end of October exceeded the amount actually issued.

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