Bank of Japan faces battle to cap bond yields
Market participants are urging the central bank to allow greater volatility
Tokyo
WHILE the Bank of Japan (BOJ) faced down the market on Friday with its offer to buy an unlimited amount of bonds, the battle over yield control may have only just begun.
The swift action allowed the BOJ to quickly assert authority over the 10-year yield, bringing it down from a five-month high of 0.105 per cent. The question is how far the central bank would have to go, and at what costs to its balance sheet, as the hawkish tilt adopted by its peers increases the extra yield offered by US Treasuries and German bunds over Japanese bonds.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
US automakers win extension on use of Chinese graphite in EV tax credits
US service sector contracts in April; price pressures up
Thaksin’s daughter calls central bank independence an ‘obstacle’
US jobs growth slows in April; jobless rate up to 3.9%
Magnitude 6.0 quake strikes Philippines, aftershocks and damage expected
Indonesia to permanently relocate 10,000 people after Ruang volcano eruptions