Japanese bond market shift spells stronger yen

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Bank of Japan boss Haruhiko Kuroda has kept yields on 10-year debt near zero but let those on longer-dated ones rise. Dwindling returns on overseas bonds could reduce local demand for foreign currency, sparking a yen rally, argues swahapattanaik:

The yield on Japan’s 20-year government bond rose to 0.46% on July 2, its highest level since March 2019. That compares with 0.28% at the end of 2019.

The Bank of Japan indicated on June 30 that it planned to increase buying of Japanese government bonds with maturities of up to 10 years in July, but its monthly plan suggested it will maintain the size of its buying in superlong bonds.

 

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