According to the Statements of Account for the end of August 2026 released today, total assets stood at ¥644.7 trillion, an increase of ¥366.3 billion from the previous month. JGS holdings stood at ¥519.9 trillion, with the month-on-month increase limited to ¥545.8 billion, down from ¥1,039.5 billion in July. Current account balances declined to ¥424.3 trillion, while the current account balances-to-total assets ratio fell to 65.8%, its lowest level in the past 12 months.
[速報] QT Flow Analysis: Monthly Increase in JGS Holdings Slows
The month-on-month increase in JGS holdings was ¥545.8 billion in August, half the ¥1,039.5 billion increase recorded in July. Since the start of 2026, month-on-month changes in non-redemption months (months of increases) had remained in the low ¥1 trillion range, but August posted the smallest increase among them.
The BOJ's balance sheet continues to follow a structure in which large-scale redemptions occur every three months, causing JGS holdings to fall sharply. Most recently, holdings declined by ¥14,793.2 billion in June 2026, after which July and August marked a phase of rebalancing through modest increases. The slower pace of increase in August indicates that this recovery phase may already be drawing to a close. The key near-term point to watch is how long the pace of increases continues ahead of the next large-scale redemption month.
[速報] Stock Analysis: JGS at 80.7%; Policy Assets Stable at 6.0%
JGS holdings as a share of total assets stood at 80.7%, edging up from 80.6% in July. Over the past 12 months, the ratio has remained within a narrow range of the high 79% to low 81% levels, with no major change in the relative weight of JGS holdings.
The policy asset ratio (ETF + J-REIT + corporate bonds) was 6.0%, down slightly from 6.1% in July. ETF holdings declined by ¥26.3 billion from the previous month, continuing the gradual downward trend in ETF holdings that has persisted since January 2026. The corporate bond ratio fell to 0.2%, indicating that corporate bond holdings are also being reduced.
| Month | JGS ratio (%) | ETF ratio (%) | Policy asset ratio (%) |
|---|---|---|---|
| 2026-06 | 81.0 | 5.8 | 6.1 |
| 2026-07 | 80.6 | 5.7 | 6.1 |
| 2026-08 | 80.7 | 5.7 | 6.0 |
The table indicates that while the JGS ratio remains somewhat elevated, policy assets—particularly ETFs—continue to decline, albeit modestly.
[Context] Progress of Passive QT Over 12 Months
The 12-month cumulative change in JGS holdings was -¥51.7 trillion as of August, widening from -¥49.5 trillion in July. This cumulative figure has deteriorated further—expanding in the direction of decline—for three consecutive months from -¥47.6 trillion in May 2026, indicating that passive QT through redemptions is steadily progressing on an annual basis.
The loans outstanding ratio was 11.1%, essentially unchanged from 11.2% in July. Compared with 13.2% as of June 2025, loans outstanding are also being reduced gradually.
The current account balances-to-total assets ratio fell to 65.8%, setting a new 12-month low. The ratio has continued to decline in stages from 73.7% in June 2025, confirming that the liability-side liquidity structure is shifting toward contraction. The monthly change in current account balances in August was -¥13,690.3 billion, representing a relatively large decline among the figures in the monthly change table.
Banknotes in circulation stood at ¥114.9 trillion. Although no comparison data with previous figures have been provided, there was no major change in their scale relative to total assets.
[Context] Corporate Sentiment and the QT Environment
According to the BOJ's Tankan survey, the business conditions DI for Q2 2026 was 22 for large manufacturers and 37 for large non-manufacturers, with both sectors continuing to improve since Q3 2025. The DI for small and medium-sized manufacturers also recovered from 1 in Q3 2025 to 9 in Q2 2026, indicating that sentiment in the corporate sector is generally improving.
The outlook DI stood at 14 for large manufacturers and 29 for large non-manufacturers, remaining at more cautious levels than the latest actual assessments. Even as balance sheet adjustments toward contraction continue, the improvement in corporate business conditions DI itself has persisted; based on the data provided, there is no indication that the progress of QT and a deterioration in corporate sentiment are occurring simultaneously.
Outlook
The key points to watch for the time being are as follows.
- Whether the pace of monthly increases in JGS holdings slows further, and developments ahead of the next large-scale redemption (historically, on a three-month cycle)
- Whether the current account balances-to-total assets ratio falls further from the 65% range, and how the liability composition changes if it does
- Whether the reduction in ETF and corporate bond holdings accelerates, and the possibility that the policy asset ratio falls below 6%
- Whether the 12-month cumulative QT pace (at -¥51.7 trillion as of August) widens further
The next Statements of Account and the next BOJ Tankan survey results will provide important evidence for assessing whether these trends are continuing.
Glossary
| Term | Definition |
|---|---|
| Statements of Account | A report on the BOJ's balance sheet position published every 10 days. It provides data on balances such as total assets, JGS holdings, and current account balances. |
| Passive QT | A form of quantitative tightening in which the BOJ allows its asset holdings to decline naturally by limiting reinvestment of maturing JGS rather than actively selling the bonds it holds. |
| Flow Effect | The impact of monthly purchases or reductions in JGS holdings on market supply and demand and price formation. This concept is used to assess changes in the pace of QT. |
| Stock Effect | The effect of the central bank's accumulated asset holdings in suppressing long-term interest rates and the term premium. |
| Current Account Balances-to-Total Assets Ratio | The share of total assets represented by current account balances (reserve balances) on the liability side of the BOJ's balance sheet. It indicates the scale of liquidity supplied to financial institutions. |
| Policy Asset Ratio | The share of total assets represented by the combined holdings of ETFs, J-REITs, and corporate bonds. It indicates the weight of unconventional monetary easing assets relative to traditional JGS purchases. |
| BOJ Tankan | The BOJ's quarterly Short-Term Economic Survey of Enterprises in Japan. It quantifies corporate sentiment through indicators such as the business conditions DI. |
| Business Conditions DI | An index based on companies' assessments of their own business conditions as 'favorable,' 'not so favorable,' or 'unfavorable,' calculated by subtracting the percentage reporting unfavorable conditions from the percentage reporting favorable conditions. |
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.