Bank of Japan hikes bond buying as benchmark yields hit decade peak
Publishing timestamp: 2023-10-02 08:55:35
Summary
The Bank of Japan (BOJ) announced that it will conduct additional purchases of Japanese government bonds with tenures of more than five years and up to 10 years. This comes as ten-year JGB yields spiked to their highest level in about a decade, nearing the BOJ's stated cap. The BOJ's decision to increase bond purchases is seen as a test of its resolve to defend its yield curve control policy. The yen weakened against the dollar, and hawkish comments in the September BOJ meeting minutes reignited expectations that the central bank is slowly preparing to end negative interest rates. Despite core inflation exceeding the BOJ's target, officials remain cautious about exiting stimulus due to a lack of sustainable inflation. However, if the yen weakens further, the BOJ may be forced to hike rates sooner than expected.
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Keywords: business news, usd/jpy, japan 10 year treasury, asia economy, central banking,