Bank of Japan Assets Tumble $146B in Q2 to Lowest Since 2020
The Bank of Japan's total assets fell by $146 billion in Q2 2026 to $3.97 trillion, the lowest since Q1 2020, marking the largest quarterly decline since the start of its quantitative tightening program.
The Bank of Japan's balance sheet shrank by $146 billion in the second quarter of 2026, bringing total assets to $3.97 trillion — the lowest level since the first quarter of 2020. This represents the steepest quarterly drop since the central bank launched its quantitative tightening (QT) program in August 2024.
From its peak in Q1 2024, the BoJ has now reduced its balance sheet by $726 billion, or 15.6%. Japanese government bond (JGB) holdings fell by $78 billion in Q2 to $3.22 trillion, the lowest since Q3 2020. Since the 2023 peak, JGB holdings are down $459 billion, or 12.5%.
In addition, the BoJ sold $74 million in equity ETFs and J-REITs last quarter, reducing those holdings by 1.0% to $234 billion — the lowest since 2022. The continued reduction in BoJ assets suggests potential for increased volatility in Japan's bond market.
Source: The Kobeissi Letter