HALISTER1: BOJ Unlikely to Let Long-Term Yields Drop Significantly: BofAML

BOJ Unlikely to Let Long-Term Yields Drop Significantly: BofAML

(Bloomberg) -- It’s “dangerous” to aggressively buy 10-year JGBs as BOJ is unlikely to allow a significant drop in yields as central bank said it would keep yield near zero percent, according to Bank of America Merrill Lynch.
  • Should BOJ allow yields to fall excessively, it would become difficult to gauge what central bank wants to do about yields, says Shuichi Ohsaki, chief Japan rate strategist at BofAML
  • Market participants are nervous ahead of 40-year JGB sale today; while many expect auction’s results to be good, they may be refraining from buying: Ohsaki; expects outcome to be slightly weak to “okay” amid an increase in issuance amount
  • Yield on 0.1% govt bond due Sept. 2026 slips 1 bp to -0.070%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Shuichi Ohsaki (Merrill Lynch Japan Securities Co Ltd)

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