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BOJ makes rare 2nd offer to buy unlimited bonds as yields test policy limits - geemong - 28-03-2022

BOJ makes rare 2nd offer to buy unlimited bonds as yields test policy limits


[Image: 2022-03-28t023647z_1_lynxnpei2r03h_rtrop...k=AosQMnP4]


The Bank of Japan desperately defended its yield target on Monday (Mar 28) by making two offers in a single day to buy an unlimited amount of government bonds, as rising long term interest rates posed the biggest challenge yet to its ultra loose policy.

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The yield on the benchmark 10-year Japanese government bond (JGB) hit a fresh six-year high of 0.250 per cent on Monday, even after the central bank stepped into the market with an offer to buy unlimited amount of JGBs to defend the implicit 0.25 per cent ceiling set around its yield target.

After the morning offer failed to push down yields, the BOJ made a second offer in the afternoon to buy unlimited amounts of JGBs with maturities of more than five years and up to 10 years.

The two offers, which were the first since Feb 10, underscored the BOJ's resolve to keep rates ultra-low, even as other central banks such as the US Federal Reserve move toward rate hikes.

Prospects of widening US-Japan interest rate differentials pushed the dollar to a more than six-year high of 123.04 yen on Monday.

"This operation is a message from the BOJ that it will maintain ultra-easy policy for the time being," Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, said after the BOJ's offer in the morning.


RE: BOJ makes rare 2nd offer to buy unlimited bonds as yields test policy limits - xandrene - 25-01-2024

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