Treasuries Finish Higher
Treasuries advanced after the Bank of Japan sold yen and reportedly bought $3 to $5 billion dollars in the foreign-exchange market overnight to prop up the dollar and drive down the strong yen. The move heightened speculation that the BoJ will use the cash to buy Treasuries.
Short-covering also prevailed after Tuesday's slide, following the Fed's decision to leave the federal funds rates unchanged, although the Fed acknowledged that the risk of inflation and deflation are about equal. Fed funds futures is pricing in a rate hike by the end of June of next year.