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29-03-2022, 07:44 PM
https://www.businesstimes.com.sg/stocks/...ond-yields
Yen crashes; BOJ moves against rising bond yields
THE Japanese yen crashed to a 6-year low versus the dollar on Monday (Mar 28), and headed for its biggest daily loss since March 2020 after the Bank of Japan (BOJ) moved to contain rising bond yields, even as US Treasury yields soared to new multi-year highs.
The BOJ's dovish stance contrasts with that of most other central banks, especially the US Federal Reserve which is expected to deliver a half-point interest rate rise in May, having kicked off its tightening cycle this month.
Treasury 10-year yields vaulted above 2.5 per cent to 3-year highs, lifting the dollar to 2-week peaks.
To stop those yield rises from spilling into Japanese bond markets, the BOJ offered to buy an unlimited amount of debt with maturities of more than 5 years and up to 10 years.
While that did not stop 10-year yields hitting the upper limit of the BOJ's policy band, it sent the yen sprawling.
The Japanese currency also lost ground against the euro, which is increasingly underpinned by expectations the European Central Bank will join the rate hike club this year. The euro gained 1.7 per cent at 136.9 yen, a 4-year high.
Yen crashes; BOJ moves against rising bond yields
THE Japanese yen crashed to a 6-year low versus the dollar on Monday (Mar 28), and headed for its biggest daily loss since March 2020 after the Bank of Japan (BOJ) moved to contain rising bond yields, even as US Treasury yields soared to new multi-year highs.
The BOJ's dovish stance contrasts with that of most other central banks, especially the US Federal Reserve which is expected to deliver a half-point interest rate rise in May, having kicked off its tightening cycle this month.
Treasury 10-year yields vaulted above 2.5 per cent to 3-year highs, lifting the dollar to 2-week peaks.
To stop those yield rises from spilling into Japanese bond markets, the BOJ offered to buy an unlimited amount of debt with maturities of more than 5 years and up to 10 years.
While that did not stop 10-year yields hitting the upper limit of the BOJ's policy band, it sent the yen sprawling.
The Japanese currency also lost ground against the euro, which is increasingly underpinned by expectations the European Central Bank will join the rate hike club this year. The euro gained 1.7 per cent at 136.9 yen, a 4-year high.
