The Bank of Japan is shrinking its balance sheet at a record pace: The Bank of Japan’s bond holdings dropped by -6.2 trillion Yen in Q1 2025, the most on record. Over the last 5 quarters, the BoJ's holdings have now declined by -14.2 trillion Yen. As a result, the BoJ's assets-to-GDP ratio has decreased by ~10 percentage points, to 117%, the lowest since 2020. By comparison, the Federal Reserve’s and the European Central Bank’s ratios are at 41% and 22%, respectively. Keep watching Japan.