The Bank of Japan has made no changes of the state bond buying on Thursday. As a result, the market has somewhat calmed down, as rumors about a reduction of the purchase volumes summoned fears that the central bank might cancel its stimulus programs.
Specifically, the purchase volume for bonds with 1-3, 3-5 and 5-10 year maturity has remained at JPY 250 billion ($2.24 billion), JPY 300 and JPY 410 billion respectively.
As a result, the price for 10-year state bonds futures added 0.1% in Japan, offsetting some losses on the Tuesday reports about a possible reduction of long-term bond buying by the Bank of Japan.
According to traders' forecasts, Japan's central bank might avoid new market upsets, once China reportedly suspended purchases of US Treasuries, which depressed US bond market.
Still, many traders believe the Bank of Japan has no alternative to a gradual cutting of state bonds buying.
On Tuesday, the Bank of Japan lowered purchases of bonds with 10-25 and 25-40 years maturity by JPY 10 billion ($88,39 million; $1 = JPY 111.580) to JPY 190 billion and JPY 80 billion