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Japanese Markets Swayed as BOJ Intervention Plunges Yields

Japanese Markets Swayed as BOJ Intervention Plunges Yields

Varun Jaitly,
  • Japanese 30 year bond yields plunged as BOJ said it was willing to buy unlimited 10 year JGBs
  • The Nikkei 225 rallied nearly 0.65% as the Japanese Yen weakened against its major counterparts
  • The Bank of Japan also announced an increase in 5-10 year JGB purchases, from ¥450b to ¥500b

Wondering how the Japanese Yen will perform in the third quarter? Check out our forecasts on the DailyFX Trading Guides Page!

The Japanese Yen weakened against its major counterparts during this past trading session as the Bank of Japan announced it was prepared to purchase an unlimited amount of 10-year fixed interest Japanese government bonds (JGBs). They also increased the amount of 5- to 10-year JGB purchases from 450 billion yen to 500 billion. These efforts from the BOJ targeted long-term yields, which have been rising steadily since mid-2016.

Following the open market operations and announcement from the BOJ, Japanese 30-year bond yields fell 4 basis points in a mere 5 minutes. That is a dramatic pickup in volatility considering an average daily range of just 1.1 basis points over the past month. That move was echoed by 10-year JGBs, where yields fell 2.2 basis points. The Nikkei opened the session lower but quickly strengthened alongside a weakening Yen, as the BOJ took part in open market operations.

Japanese Markets Swayed as BOJ Intervention Plunges Yields

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