The Bank of Japan has recently sold a portion of its futures-linked 10-year government bonds in order to improve trading liquidity in the market. This action was taken to address a shortage of these bonds, which are commonly used as hedging instruments against market fluctuations.
The liquidity of these bonds is crucial as they are the most cost-effective securities for the March contract of 10-year bond futures, which has an impact on overall market stability.
As of November 29, the BOJ's holdings of the bonds due in March 2032 decreased to ¥8.0262 trillion ($53.5 billion), down from ¥8.2262 trillion on November 20.