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BOJ conducts emergency bond purchases after key yield breaches policy ceiling

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Author Fujita Junko

TOKYO (Reuters) – JAPAN’S 1-year government bond yields breached the Bank of Japan’s policy range for the second straight session on Wednesday The cap prompted the central bank to enter the market with emergency bond purchases and loans.

Investors once again lambasted the Bank of Japan’s ultra-loose rate stance, with the central bank expected to remove its yield curve control after incoming governor Kazuo Kazuo (YCC) Policy Ueda took the helm in April.

Ueda will testify before the Japanese House of Representatives on Friday.

rate of return JGBs climbed to 0.% broke through the central bank’s 0.5% limit on Wednesday and hit 1 The highest level since the month . It last traded at 0.5%.

The Bank of Japan bought 52 billion yen (2.2 billion US dollars) for a period of 5 to

Japanese Government Bonds Year and Billion yen of bonds due arrive Year.

Mitsubishi UFJ (NYSE: 200 Mitsubishi UFJ ) The fixed-income arm of Treasury Sai Asset Management said he expected the Bank of Japan to conduct emergency operations as yields rise, at least until its next policy meeting in March.

“But it is questionable whether this will work,” he added.

In battle to curb high yields, BOJ hits record . trillion yen ($11. billion) worth of January government bonds. Foreign investors have been particularly aggressive in attacking the Bank of Japan’s policies. They sold more than 4 trillion yen of JGBs in January, a monthly record, data from the Japan Securities Dealers Association showed. To deter speculation, the BOJ quadrupled the minimum borrowing fees it charges financial institutions last week 1-year Japanese Government Bonds effective from February .

The five-year Japanese government bond yield rose to a high of zero. 27%Wednesday, the highest since January , before easing to 0. 23% after the Bank of Japan announced that it will provide 5-year mortgage loans to financial institutions.

The lending operation is designed to encourage investors to buy 5-year bonds and reduce the interest rate swap of the same maturity that moves along with the 5-year JGBs. In exchange for submission.

This will be the BOJ’s The revised operating rules for the supply of funds for such loans for the fourth time.

($1=23.175 JPY)



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