Japanese Bond Yields Drop on Speculation of BOJ Easing
Japanese bond prices rallied, pushing the yields lower especially at the
short-end of the curve as strong Yen and weak inflation expectations
triggered speculation of fresh BOJ easing.
The 10-yr benchmark
government bond yield fell to -0.07%. The yield has been below zero even
since BOJ moved interest rates to negative territory.
At the
short-end of the curve, the 2-yr yield was down more than one basis
point at -0.228%. Yesterday, the BoJ Governor Kuroda expressed that the
effect of negative interest rates is very strong so they would like to
steadily proceed with easing policy and the timing of the next easing
would be determined by inflation expectations (heavily dependent on
Yen).
He further added that monetary easing tools would entail
suitable combination of increased asset purchase, reducing interest
rates deeper into negative zone, and purchase of risky assets.
(Market News Provided by FXstreet)
