2023-10-24 01:14:10
On the 24th, the Bank of Japan announced temporary operations for bonds with remaining maturities of more than 5 years and less than 10 years, and those with remaining maturities of more than 10 years and less than 25 years. The purchase amounts are 300 billion yen and 100 billion yen, respectively. This is the third temporary operation this month, following on the 4th and 18th. This appears to be an attempt to suppress interest rates in response to the fact that until the previous day, long-term interest rates had hit a new high since 2013.
Kazuya Fujiwara, bond strategist at Mitsubishi UFJ Morgan Stanley Securities, pointed out that the temporary operation was surprising. Although long-term interest rates were not rising, he said, “I think they were concerned that futures were sluggish and Japanese government bonds were not being bought much compared to the drop in U.S. interest rates the day before.”
With the Bank of Japan’s monetary policy meeting scheduled for next week, bond yields are rising around the world, and the market is questioning the Bank of Japan’s tolerance for rising interest rates. Governor Kazuo Ueda has said the Bank of Japan will patiently continue easing policy to achieve its inflation target, but there is widespread speculation that the Bank of Japan will make some tweaks to policy at this month’s meeting.
The Bank of Japan’s easing policy is contributing to the depreciation of the yen in foreign exchange markets. The yen is trading near its lowest level in nearly 30 years, pushing up import prices and fueling inflation.
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