Kuroda Surprise Drives Down Yields as GPIF to Sell: Japan Credit
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The Bank of Japan’s expanded monetary easing came just in time to spur a bond rally even as the nation’s $1.1 trillion pension fund starts to cut debt holdings.
The 30-year yield dropped 20 1/2 basis points in two days after falling to 1.39 percent, the lowest since April 2013. This followed the BOJ’s unexpected decision to increase purchases of Japanese government bonds to a record annual pace of 80 trillion yen ($704 billion) last week. That came just hours before Government Pension Investment Fund, the world’s biggest pool of retirement savings, said it will reduce its domestic debt allocations to 35 percent of assets from 60 percent.