BOJ Goes From Stopping Advance in Yields to Battling Decline
- Thursday marks first anniversary of yield-curve control policy
- “Difficult to stem the drop in yields,” Mitsubishi UFJ says
Pedestrians walk past the Bank of Japan (BOJ) headquarters in Tokyo, Japan.
Photographer: Kiyoshi Ota/BloombergThis article is for subscribers only.
After spending a year trying to prevent benchmark yields from rising above zero percent, the Bank of Japan now faces the challenge of stopping them from falling too low.
Japan’s 10-year yield has gone from a one-year high in February to slipping below the BOJ’s targeted zero percent level earlier this month amid a bout of global risk aversion stemming from North Korea tensions. While the central bank has cut back on its debt purchases three times since mid-August, strategists question if that will be enough should global bonds keep rallying.