Biggest Bank Quitting Japan Bond Club Shows BOJ Crushing Market
- Bond market functionality has deteriorated, BOJ survey shows
- MUFG unit says it may quit role of primary dealer for JGBs
Pedestrians walk past the main branch of Bank of Tokyo-Mitsubishi UFJ Ltd. in Tokyo.
Photographer: Akio Kon/BloombergBank of Tokyo-Mitsubishi UFJ Ltd.’s move to consider quitting as one of 22 primary dealers is the latest sign of stress in a debt market that’s struggling to cope with the Bank of Japan’s unprecedented monetary stimulus.
The bond market’s functioning has either decreased or failed to improve, according to 92 percent of respondents to a central bank survey last month. BOJ Deputy Governor Hiroshi Nakaso said Thursday that the world’s second-largest debt market has been “significantly affected” by monetary easing. The central bank’s crusade to revive the economy since April 2013 has sent volatility soaring while failing to spark inflation, with yields tumbling below zero on maturities up to a decade.