BOJ Failure to Spur Loan Demand Forces Bill Binge: Japan Credit
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The Bank of Japan’s failure to spur demand for its cheap loans is forcing it to buy more treasury bills rather than make more-productive asset purchases.
The BOJ raised holdings of bills maturing in one year or less by 7.21 trillion yen ($70 billion) this year as of Feb. 28, exceeding the 6.09 trillion yen increase for the eight months through Dec. 31 after the central bank expanded stimulus in April. In contrast, the outstanding balance of its loan programs fell 10 percent between April and February. Three-month bill rates have almost halved in the past six months to 0.04 percent, while those in the U.S. have risen three basis points.