Shortly after calming the currency market and taking a break, the Japanese monetary authorities were hit by tensions in the government bond market.
Between rising global yields and weaker yen, the results of the 20-year government bond auction on the 15th were unsatisfactory and long-term bonds fell.
Also, according to the announcement by the Ministry of Finance on the same day, foreign investors sold about 2.6 trillion yen in Japanese bonds, mainly government bonds, in the week ending 9th. It was the largest since a speculative attack. in mid-June.
Medium / long-term domestic investments by foreign investors, weekly net sales since June – Statistics from the Ministry of Finance
The yield on 10-year Japanese government bonds reached the upper limit of the range allowed by the Bank of Japan at 0.25%, while the yield on previously issued bonds with nine years remaining to maturity was reversed at 0.26% .
Tensions in the bond market are another headache for regulators battling markets for a weaker yen. At the heart of it all is the Bank of Japan’s accommodative monetary policy, which is at odds with global tightening.
Tsuyoshi Ueno, a senior economist at the NLI Research Institute, commented on the sale by foreign investors, saying, “They are likely to reduce their holdings in bonds as interest rates rise around the world.” crisis, there is the possibility that some speculations on the Bank of Japan’s monetary easing will be curbed due to inflationary pressures such as the relaunch of higher costs “. Speculators short-circuited Japanese government bonds in June in anticipation that the Bank of Japan would be forced to adjust its policy. The BOJ responded with huge buying, bringing 10-year yields back below 0.25%. This time, the yen fell to a 24-year low and officials have threatened to intervene, but the pressure on the BOJ is mounting again. Original title:Stress signals disappear in the Japanese bond market as buyers disappear(extract) – Related posts:
