Table of Contents
This service uses statistical data published by the Bank of Japan, but the content of this service is not guaranteed by the Bank of Japan.
This service uses statistical data published by the Bank of Japan, but the content of this service is not guaranteed by the Bank of Japan.
According to the BOJ Statements of Account (BOJ balance sheet) data released today for end-June 2026, the Bank of Japan’s total assets stood at ¥639.6 trillion, a substantial month-on-month contraction of ¥24.8 trillion. JGS holdings were ¥518.3 trillion, down ¥14.8 trillion (147,932億円) from the prior month, bringing the annualized QT pace to ¥49.2 trillion. While quarter-end liquidity swings are evident, the progression of passive QT has become more pronounced.
The BOJ Statements of Account show JGS holdings at ¥518.3 trillion at end-June 2026, a month-on-month decrease of ¥14.8 trillion (147,932億円). This is the second-largest drop after the ¥15.8 trillion decrease at end-March 2026, confirming the concentrated impact of bond redemptions at quarter-ends.
Total assets contracted by ¥24.8 trillion to ¥639.6 trillion month-on-month. This decline exceeds the ¥14.8 trillion JGS decrease, largely driven by a ¥9.7 trillion reduction in loans outstanding. Loans outstanding fell to ¥68.0 trillion, continuing a downward trend from ¥79.5 trillion at end-December 2025.
Looking at month-on-month JGS changes, a pattern has become established: quarter-end months (March, June, September, December) see decreases in the ¥13–16 trillion range, while other months typically record increases of about ¥1–2 trillion. Evaluating the annual QT pace therefore requires accounting for this seasonality.
On the asset composition side, the JGS share (of total assets) rose to 81.0%. This is up 0.8 percentage points from 80.2% in the prior month and 1.9 percentage points from 79.1% in April 2025. The rise reflects a faster pace of total asset contraction relative to JGS reductions.
Policy assets (ETF + J-REIT + corporate bonds) totaled ¥39.3 trillion, representing 6.1% of total assets, up 0.1 percentage point from 6.0% in the prior month. By component, ETFs were ¥37.0 trillion (a month-on-month decline of ¥29.7 billion), J-REITs ¥0.7 trillion, and corporate bonds ¥1.6 trillion. ETFs have been declining by ¥20–30 billion per month since January 2026, reflecting natural reductions from redemptions.
The structural rise in the JGS share indicates that non-JGS assets—particularly loans outstanding—are contracting faster under the QT process. The loans outstanding ratio was 13.2% in April 2025 but had fallen to 10.6% by end-June 2026. This 2.6 percentage-point decline has exerted upward pressure on the JGS share.
The 12-month cumulative month-on-month JGS change (the annual QT pace) reached negative ¥49.2 trillion at end-June 2026, an acceleration of ¥1.6 trillion from ¥47.6 trillion the prior month. Compared with ¥45.1 trillion at end-March 2026, this represents a ¥4.1 trillion acceleration over three months.
This annual QT pace is an indicator of the effective normalization speed after smoothing quarter-end large declines and smaller mid-month increases. The BOJ has ceased purchasing JGS, and balance sheet contraction is proceeding solely through natural reductions from maturities—i.e., a passive QT structure is taking hold. An annual pace of ¥49.2 trillion corresponds to roughly 7.7% of total assets of ¥639.6 trillion.
Over the past 12 months, quarter-end monthly declines have stabilized in the ¥13–16 trillion range, producing roughly ¥60 trillion of reductions across the four quarter-ends. Meanwhile, the other eight months show an average monthly increase of about ¥1.5 trillion, totaling roughly ¥12 trillion of increases annually. The net effect is a structural annual decline on the order of ¥48–50 trillion.
On the liabilities side, current account balances (当座預金) stood at ¥440.4 trillion, a month-on-month decrease of ¥11.7 trillion. The current account ratio (current account balances as a share of total assets) was 68.9%, up 0.9 percentage point from 68.0% the prior month.
The current account ratio has trended down from 74.3% in April 2025, falling to 67.4% in February 2026 and since fluctuating in the 68%–70% range. Although current account balances have fallen alongside shrinking total assets, the ratio has remained relatively stable.
Banknotes in circulation amounted to ¥115.0 trillion, showing no major change over the past 12 months, which suggests stable cash demand in the economy.
Monthly swings in current account balances show that June 2026’s ¥11.7 trillion decline was smaller than the ¥21.6 trillion decline in September 2025 and the ¥16.1 trillion decline in December 2025. Quarter-end liquidity swings appear to be driven by the timing of loan reductions and JGS redemptions.
According to the BOJ Tankan for Q1 2026, the large-manufacturers’ business conditions DI was 17 (forward-looking 15), improving 2 points from 15 in the previous quarter. Large non-manufacturers’ DI was 36 (forward-looking 28), up 2 points from 34. Medium and small firms generally showed flat to improving trends.
Corporate sentiment has remained firm despite the QT backdrop, and there is no clear evidence that a ¥49 trillion annualized balance sheet reduction is exerting a marked downward pressure on the real economy at this time. However, forward-looking DIs are below current DIs, indicating some corporate caution.
The key near-term focus will be month-on-month JGS flows in the BOJ Statements of Account for end-July. Historically, the month following a quarter-end often records JGS increases of ¥1–1.5 trillion. Confirming a small mid-month increase in July would validate the continuation of the passive QT seasonal pattern.
Trends in loans outstanding will also be important. Loans outstanding fell to ¥68.0 trillion at end-June; the level at which they stabilize from July onward will influence the pace of total asset contraction. Historically, loans that decline at quarter-ends have tended to rebound slightly the following month, so July end data will be watched closely for a repeat of that pattern.
It will also be important to monitor whether the current account ratio remains in the 68%–70% range. With the annual QT pace hovering around ¥50 trillion, whether the downward trend in the current account ratio accelerates or stabilizes at current levels will influence assessments of market liquidity.
Regarding policy assets, ETFs are expected to continue natural monthly declines in the ¥20–30 billion range. The structure in which policy assets’ share remains in the low-6% range is expected to persist in the near term.
パッシブQT: Passive QT: a quantitative tightening method in which the central bank does not actively sell assets but instead allows the balance sheet to shrink through natural runoff from maturities. The BOJ has stopped JGS purchases and is implementing QT by allowing only maturing holdings to decline.
年間QTペース: Annual QT pace: the 12-month cumulative month-on-month change in JGS holdings. It indicates the effective balance sheet normalization speed after averaging large quarter-end declines and smaller mid-month increases, and is used to assess the trend pace of normalization net of seasonality.
国債比率: JGS share (of total assets): the proportion of total assets represented by JGS holdings. This stock metric is a core indicator of balance sheet structure; a rising share indicates an increasing relative weight of JGS.
当座預金比率: Current account ratio: the share of total assets represented by current account balances (当座預金). This liabilities-side liquidity measure, when declining, suggests relatively tighter liquidity conditions.
政策資産: Policy assets: the BOJ’s holdings of ETFs, J-REITs, and corporate bonds acquired as part of monetary easing. Changes in their balances reflect shifts in policy stance outside of JGS.
フロー効果: Flow effect: the impact that the central bank’s monthly purchases or sales of assets have on market supply-demand and price formation. In QT, changes in the monthly reduction pace determine market impact.
ストック効果: Stock effect: the effect that the central bank’s cumulative holdings have on long-term interest rates and the term premium. The absolute level of holdings and asset composition ratios are important evaluation metrics.
This column was automatically generated by AI integrating Bank of Japan balance sheet data (Statements of Account), Federal Reserve (FRED), and ECB statistics as a BOJ balance sheet analysis resource. This is not a recommendation to buy or sell any financial instruments. Please make investment decisions at your own responsibility and consult professionals as needed.