Yingwei Financial Investing – On Wednesday, the Bank of Japan announced unscheduled bond purchases to defend its ceiling on JGB yields, according to media reports.
The Bank of Japan said it would buy 150 billion yen of 5-10-year government bonds and 100 billion yen of 10-25-year government bonds. At the time of writing, the yield on Japan’s 10-year government bond fluctuated around 0.25%.
Mari Iwashita, chief market economist at Daiwa Securities, said that these actions are sending the market a message that the central bank is restraining the rise in yields.
Previously, Japanese government bonds suffered a frantic sell-off in June, but yields remained below 0.25% amid the Bank of Japan’s frenzied buying. Bank of Japan Governor Haruhiko Kuroda stressed his determination to keep interest rates at extremely low levels.
Data released on the 20th showed that Japan’s core CPI rose 2.8% in August, the highest since October 2014.
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(Editor: Chen Han)