At a press conference on the 5th, Chief Cabinet Secretary Minoru Kihara said he was "not aware of and cannot comment on" a Jiji Press report that Prime Minister Sanae Takaichi had asked Bank of Japan Governor Kazuo Ueda to buy government bonds. He stressed that specific monetary policy measures should be left to the BOJ, and expressed hope for appropriate management through close cooperation between the government and the central bank. Meanwhile, Junya Ogawa, leader of the centrist Reform Coalition, criticized the request as likely to lead to further yen depreciation and an unhealthy rise in long-term interest rates, and said the prime minister's "responsible active fiscal policy" was irresponsible and on the verge of collapse. Toshiko Takeya, leader of Komeito, voiced concern that the issue could undermine the BOJ's independence, while Akira Koike, secretariat head of the Japanese Communist Party, condemned it as a blatant act unprecedented under past administrations, and questioned the basic direction of economic policy, calling the simultaneous pursuit of yen depreciation measures and requests for government bond purchases incoherent.
Report of BOJ bond purchases could weaken JPY, but uncertainty and criticism may limit effect; ambiguous direction.
Report of PM asking BOJ to buy bonds could pressure yields lower, but uncertainty and criticism may limit effect; overall negative for yields.
