Summary:
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BOJ market operations meetings are technical, not policy-setting
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Focus is on bond buying and liquidity mechanics
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Small tweaks can still send strong market signals
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Often used to prepare markets ahead of policy shifts
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Can move JGBs, yen and equities
The Financial Markets Department of the Bank of Japan will hold the “meeting on market operations” on February 26, 2026
- the meeting on market operations will discuss recent market developments, BOJ operations, JGB market liquidity and functionality, money markets
I wouldn’t read too much into this. I think its significant for the fact that the news of the meeting is hitting headlines at this time of rapid yen weakening. But … its not until February 26! We could be at 200 by then! I exaggerate … but we could be much higher and Japanese officials are already on edge, if they decide to act on some sort of actual intervention they won’t wait another six weeks just to get this meeting out the way.
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A Bank of Japan (BOJ) meeting on market operations is a technical but closely watched event that focuses on how monetary policy is implemented in financial markets, rather than the direction of policy itself.
Unlike a formal BOJ policy meeting — where interest rates, yield targets or guidance are debated — a market operations meeting concentrates on the mechanics of liquidity provision. These sessions review the BOJ’s bond-buying framework, including the size, frequency and maturity buckets of Japanese government bond (JGB) purchases, as well as money-market operations such as repo facilities and collateral terms.
The stated aim is to ensure smooth market functioning and effective policy transmission. In practice, however, even modest operational adjustments can carry meaningful market signals. Changes to purchase amounts at specific maturities, for example, can influence yield curves, affect bank and insurer balance sheets, and alter expectations around the BOJ’s tolerance for higher long-term rates.
Markets pay particular attention because, in Japan, operational tweaks have often preceded broader policy shifts. Reducing bond purchases or increasing flexibility around operations can be interpreted as a form of “backdoor tightening,” even if the BOJ insists its overall policy stance is unchanged. As a result, these meetings can move the yen, JGB yields and equities despite their technical framing.
Topics typically discussed include liquidity conditions in the JGB market, volatility at specific tenors such as the 10-year or super-long end, distortions created by sustained BOJ buying, and the impact of operations on financial institutions. Outcomes may include fine-tuning purchase schedules, adjusting the balance across maturities, or modifying repo and collateral arrangements.
Importantly, a market operations meeting does not signal an imminent rate hike or policy pivot by default. But in a system where the BOJ remains a dominant market participant, changes to the “plumbing” can still shape expectations about the future path of policy.
For investors, the distinction matters: while these meetings are not about tightening or easing per se, they can quietly redefine the contours of Japan’s monetary framework and influence asset prices well ahead of any formal announcement.
