HALISTER1: BOJ May Want to Keep 10-Year JGB Yields Above -0.10%: Analysts

BOJ May Want to Keep 10-Year JGB Yields Above -0.10%: Analysts

(Bloomberg) -- BOJ probably doesn’t want a drop in 10-year JGB yield to -0.10% after yields approached that level, says Makoto Yamashita, Tokyo-based chief strategist at Deutsche Securities.
  • Today’s reduction in central bank’s debt purchases can be seen as a sign that BOJ is looking to avoid lowering 10-year yields to -0.10% until next policy meeting, says Souichi Takeyama, a rates strategist at SMBC Nikko Securities
  • Cut in BOJ’s debt purchases is likely to strengthen market’s perception that -0.10% is lower bound of what central bank will tolerate, says Hiroki Tsuji, a Tokyo-based market analyst at Mizuho Securities
  • NOTE: BOJ cuts bond purchases of 5- to 10-year maturities to 410b yen today from 430b yen at last operation on Sept. 26
    • This marks first time since March that BOJ changes a purchase amount before releasing its bond-buying plan for the next month; Oct. plan is due at 5pm Tokyo time
  • 10-year yield up 2 bps at -0.070%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Makoto Yamashita (Deutsche Bank AG)
Hiroki Tsujimura (Nikko Asset Management Co Ltd)
Souichi Takeyama (SMBC Nikko Securities Inc)

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