The Bank of Japan will consider slowing down the pace of reducing bond purchases next year.

Four sources familiar with the thinking of the Bank of Japan said that the Bank of Japan is considering slowing down the pace of reducing its bond purchases starting from the next fiscal year, signaling its focus on avoiding large-scale market turmoil. Last month, long-term Japanese government bond yields surged to record highs, reflecting investors' concerns about Japan's deteriorating public finances. The sources said that there is not yet a consensus within the Bank of Japan, with some believing that the central bank should focus on reducing its interventions in the bond market, and therefore lean towards maintaining the current pace. The Bank of Japan will make its final decision at its next policy meeting on June 16-17, at which time it will evaluate the current debt reduction plan extending until March and propose follow-up plans for after April 2026.