Who will replace BoJ as main buyer of JGBs?
Key points
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BoJ's ownership of outstanding JGB issuance has fallen 1.9ppt after peaking at 53.9% and is expected to continue declining as QT proceeds
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Financial institutions have most room to increase their ownership share, but obstacles include higher funding costs and mark-to-market valuation
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We think Bank may eventually consider indicating terminal rate to enable smooth handoff to other entities
