Benchmark Bonds Fail to Trade in Japan as BOJ Freezes Yields

Japan’s 10-year bonds failed to trade Wednesday -- the first time that’s happened in more than a year.

The benchmark notes hadn’t changed hands as of 4:30 p.m. in Tokyo according to Japan Bond Trading Co., the nation’s largest inter-dealer debt broker. The freeze comes after the Bank of Japan announced in September its plans to hold the 10-year yield at about zero percent.

“Not many investors are aggressively taking positions, maybe because they don’t feel like doing so given how the BOJ is controlling the yield curve,” said Makoto Suzuki, senior bond strategist in Tokyo at Okasan Securities Group Inc. “The market will probably become more deadlocked.”

A frozen 10-year Japanese yield removes a bellwether from the global bond market. The securities led a debt rally in July that pushed yields around the world to record lows and then helped drive them higher in the third quarter.

The last time the benchmark bond failed to trade was on Sept. 24, 2015.

— With assistance by Hidenori Yamanaka

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