BREAKING: The Bank of Japan's total assets dropped -$146 billion in Q2 2026, to $3.97 trillion, the lowest since Q1 2020. This also marks the largest quarterly decline since the Quantitative Tightening (QT) program began in August 2024. Since the Q1 2024 peak, the BoJ has reduced its balance sheet by -$726 billion, or -15.6%. Japanese government bond holdings fell -$78 billion in Q2, to $3.22 trillion, the lowest since Q3 2020. Since the 2023 peak, JGB holdings have dropped -$459 billion, or -12.5%. The BoJ also sold -$74 million in equity ETFs and J-REITs last quarter, bringing its holdings down by -1.0%, to $234 billion, the lowest since 2022. Japan’s bond market is poised for more volatility.(The Kobeissi Letter)