According to the BOJ Statements of Account for the end of September 2026, released today, the BOJ’s total assets stood at ¥625.0253 trillion, down ¥19.6367 trillion from the previous month. JGS holdings had declined to ¥504.0079 trillion, a month-on-month decrease of ¥15.9197 trillion. This was the largest decline in the past year, as the pronounced quarter-end drop pattern recurred.
[速報] QT Flow Analysis: ¥15.9 Trillion Drop in JGS Holdings, the Largest in the Past 12 Months
JGS holdings fell by ¥15.9197 trillion month on month in September. This was the fifth major quarter-end decline, following decreases of ¥14.8911 trillion in September 2025, ¥15.3987 trillion in December 2025, ¥15.8104 trillion in March 2026, and ¥14.7932 trillion in June 2026.
This pattern shows clear seasonality: JGS holdings decline substantially at quarter ends in March, June, September, and December, while increases in the intervening months are modest, at around ¥1 trillion. Most recently, holdings edged up by ¥1.0395 trillion in July and ¥545.8 billion in August, before a sharp reversal in September.
The concentration of maturities in the BOJ’s JGS portfolio may help explain this quarterly pattern. Given the substantial month-to-month volatility, it is not appropriate to assess the pace of QT based on a single month’s data alone.
[速報] Stock Analysis: JGS Share at 80.6%; Policy Asset Share Rises to 6.2%
The JGS share of total assets was 80.6%, broadly unchanged from 80.7% the previous month. Since both total assets and JGS holdings fell substantially, the impact on the ratio itself was limited.
Meanwhile, the policy asset share—the combined value of ETFs, J-REITs, and corporate bonds as a proportion of total assets—rose to 6.2% from 6.0% the previous month. This increase in the share reflects a smaller denominator, as total assets contracted while the ETF, J-REIT, and corporate bond balances remained broadly flat. ETF holdings themselves declined by ¥27.8 billion month on month, indicating that the gradual decline in the stock of these assets is continuing.
| Item | 2026-08 | 2026-09 | Change |
|---|---|---|---|
| Total assets (¥tn) | 644.7 | 625.0 | −19.6 |
| JGS share (%) | 80.7 | 80.6 | −0.1pt |
| Policy asset share (%) | 6.0 | 6.2 | +0.2pt |
| Current account balances/total assets (%) | 65.8 | 66.7 | +0.9pt |
The table shows that during the sharp contraction in total assets, the JGS share remained almost unchanged, while the policy asset share became more prominent in relative terms because of the denominator effect.
[Context] Historical Perspective: Cumulative 12-Month QT Widens to ¥52.7 Trillion
Based on calculations using BOJ Statements of Account data, the cumulative month-on-month change in JGS holdings over the latest 12 months was a decrease of ¥52.7 trillion. This was wider than the ¥51.7 trillion decline recorded the previous month, indicating that passive QT continues to progress on an annual basis.
The 12-month cumulative decline has widened for three consecutive months, from ¥49.2 trillion as of June 2026 to ¥49.5 trillion in July, ¥51.7 trillion in August, and ¥52.7 trillion in September. The data clearly show how large quarter-end redemptions push up the cumulative figure.
The current account balances-to-total assets ratio rose to 66.7% from 65.8% the previous month. However, over the past 12 months, the ratio has generally trended down from its peak of 72.7% in July 2025. Data over the coming months will show whether this latest rebound marks a trend reversal. If total assets contract (the denominator shrinks) faster than current account balances decline (the numerator shrinks), the ratio is likely to rise. In September, total assets fell by ¥19.6367 trillion, while current account balances declined by only ¥7.7266 trillion, resulting in an increase in the ratio.
Banknotes in circulation stood at ¥114.2474 trillion. Since the data for the past 12 months do not provide a detailed trajectory for banknote balances comparable to the statistics for total assets and JGS holdings, this figure is noted as a single-month level only.
[Context] Business Sentiment and the QT Environment
According to the BOJ’s Tankan survey, the business conditions diffusion index (DI) in the September 2026 survey (2026-Q3) was 24.0 for large manufacturers, up from 22.0 in 2026-Q2. For large non-manufacturers, the index was 35.0, slightly down from 37.0 in the previous quarter but still at a high level. The index for small and medium-sized manufacturers was 14.0, a substantial improvement from 6.0 in 2025-Q4.
The outlook DI, meanwhile, was 17.0 for large manufacturers and 28.0 for large non-manufacturers, both below their current readings, indicating a cautious business outlook. Even as current account balances continue their structural decline under passive QT, business sentiment has generally improved. The Tankan data therefore show that, at present, progress in QT is not coinciding with a deterioration in real-economy sentiment.
Outlook: The October–December Quarter-End Pattern and What to Watch in the Next Release
Key points to watch include:
- If the past pattern holds, JGS holdings may post modest increases in October and November. It will be important to see whether the increases remain within the historical range of around ¥1 trillion.
- December is a quarter-end month. Watch for another substantial decline, similar to the ¥15.3987 trillion drop in December 2025.
- Assess whether the rebound in the current account balances-to-total assets ratio to 66.7% marks a reversal or whether the ratio returns to its previous downward trend.
- The policy asset share has risen to 6.2%. Check whether the share of ETFs and other assets with broadly unchanged balances rises further as total assets continue to contract.
- In the next Statements of Account release, due in October, track how the cumulative 12-month pace of QT changes from ¥52.7 trillion.
The BOJ continues to publish its Statements of Account every ten days and monthly. When the end-October data are released next, it will be important to assess whether the quarter-end pattern observed this time is repeated.
Glossary
| Term | Definition |
|---|---|
| Statements of Account | A preliminary BOJ balance sheet report published every ten days. Month-end figures are used in monthly balance sheet analysis. |
| Passive QT | A form of Quantitative Tightening in which the BOJ allows its balance sheet to shrink naturally by limiting reinvestment as JGS holdings mature, rather than actively selling bonds. |
| Flow effect | The impact of monthly purchases or declines in JGS holdings on market supply and demand and price formation. Changes in the pace of QT itself are a focus of attention. |
| Stock effect | The effect of the central bank’s accumulated JGS holdings in suppressing long-term interest rates and the term premium. The level of holdings and the trend in their share are key considerations. |
| Policy assets | The combined BOJ holdings of ETFs, J-REITs, and corporate bonds as part of monetary policy. These assets were accumulated during the quantitative easing period, and changes in their share are an indicator of the policy stance. |
| Current account balances-to-total assets ratio | BOJ current account balances divided by total assets. It indicates the liquidity composition of the liability side and the relative scale of financial institutions’ reserve balances. |
| Business conditions DI | An index in the BOJ Tankan survey that measures firms’ assessment of business conditions. It is calculated by subtracting the share of firms responding “unfavorable” from the share responding “favorable.” |
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.