The ratio of Japanese government bonds held by the Bank of Japan fell for the second straight quarter at the end of March but remained high at 53.25 percent of state debt, central bank data showed Thursday.
While the ownership rate declined from 53.78 percent in December, the still massive bond holdings, accumulated through years of unorthodox monetary easing steps to create inflation, pose a challenge to the BOJ. It decided to reduce its purchases at its meeting in June.
Including short-term bonds, the BOJ's holdings fell to 47.39 percent at the end of March from 47.90 percent in December. Foreign investors' holdings rose to 13.68 percent from 13.25 percent.
At the end of a policy meeting on March 19, the BOJ raised interest rates for the first time in 17 years and scrapped its yield cap program under which it aggressively bought bonds to keep borrowing costs depressed. To prevent bond yields from surging, the central bank did not end its bond purchases altogether.
The quarterly data also showed assets held by Japanese households hit another record of 2,199 trillion yen ($14 trillion), up 7.1 percent from a year earlier.
Among the assets, those held in securities jumped 33.7 percent to 313 trillion yen and investment trusts rose 31.5 percent to 119 trillion yen.
Cash and deposits, which accounted for half of the total, increased 1.1 percent to 1,118 trillion yen.
