Chart of the week: Japan’s battle to hold down bond yields

The Bank of Japan has pledged to maintain its "quantitative and qualitative easing" (QQE) policy, which involves buying enough Japanese government bonds (JGBs) to keep the ten-year JGB yield within a range of -0.1% to +0.1%. The bank has already bought vast amounts of JGBs over the past four years as part of its plan to lift Japan's inflation rate to around 2%.

This has made it the largest holder of JGBs, owning more than 40% of all outstanding bonds. However, with inflation still below target and ten-year JGB yields recently creeping above 0.1%, it seems likely that it will accumulate many more.

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