TOKYO -- A paper by Bank of Japan staff has set the bond market buzzing about whether the central bank is laying the groundwork for an eventual exit from its long-running monetary easing program.
The Oct. 1 working paper discusses how curtailing the bank's purchasing of government bonds would affect the market. It also includes a simulation of a scenario where a central bank begins to trim sovereign debt holdings. It was co-authored by two employees of the Monetary Affairs Department, which plans monetary policy and analyzes the effects of the bond purchasing program.
