Bank of Japan Research Casts Doubt on Kuroda’s Comfort on Bonds
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The Bank of Japan’s own researchers are undermining Governor Haruhiko Kuroda’s view that the market is functioning fine as the central bank buys an unprecedented amount of debt.
Some indicators suggest liquidity in Japanese government bonds is falling after long-term yields dropped, regulations changed and the central bank bought debt, according to a BOJ report published on March 19. A gauge of expected bond price swings was set for its biggest quarterly gain since 2013 as two-year notes remained untraded from March 19-20 at Japan Bond Trading Co., the nation’s largest inter-dealer debt broker.