How and why has the Bank of Japan become such a large holder of Japanese government bonds? The Japanese government has raised taxes on the wealthiest Japanese corporations to fund its bond issuance program. The government collected large sums that have used to buy back its own government bonds. The Bank of Japan 'printed' (injected) yens into the economy which has led to higher inflation expectations and a drop in the value of Japanese government bonds. Through an asset-purchase stimulus program known as quantitative easing (QE). The Bank of Japan buys newly issued Japanese government debt, injecting money (yen) into the economy. This results in an increase in the price of the bond and a decrease in the yield (interest rate) that the bond pays. debt, in turn, increases the value of the bonds and lowers their yield (interest rate). How and why has the Bank of Japan become such a large holder of Japanese government bonds? The Japanese government has raised taxes on the wealthiest Japanese corporations to fund its bond issuance program. The government collected large sums that have used to buy back its own government bonds. The Bank of Japan 'printed' (injected) yens into the economy which has led to higher inflation expectations and a drop in the value of Japanese government bonds. Through an asset-purchase stimulus program known as quantitative easing (QE). The Bank of Japan buys newly issued Japanese government debt, injecting money (yen) into the economy. This results in an increase in the price of the bond and a decrease in the yield (interest rate) that the bond pays. debt, in turn, increases the value of the bonds and lowers their yield (interest rate)