TOKYO -- Proposed changes to the way Japanese government bonds are auctioned could make it easier for the Bank of Japan to keep interest rates near the target of zero for now -- and to draw down monetary easing when the time comes.
The Ministry of Finance is considering boosting the minimum mandatory bid in JGB auctions for the 21 institutions designated as primary dealers from 4% of the total on offer to 5%. This would ensure that all floats are 105% subscribed, up from a minimum of 84% currently, warding off the risk of a failed auction.
