The 1% Threat in Japan That Has Global Bond Markets on Edge
- BOJ yield curve likely to steepen on tweaks to trading range
- Super-long JGBs may finally touch 1%, key level for insurers
Bank of Japan headquarters in Tokyo.
Photographer: Kiyoshi Ota/BloombergThis article is for subscribers only.
With investor attention firmly on the spike in the Japanese 10-year yield this week, officials at the U.S. Treasury and France’s Agence France Trésor, will be looking at the longer end of the curve -- with trepidation.
A yield of at least 1 percent on the 30-year JGB is seen as the level that will tempt Japanese investors to shift some of the $2.4 trillion of overseas debt they hold back home. The Bank of Japan’s new guidance, tolerating a 10-year yield of as high as 0.2 percent, could get longer-term bonds close to that, according to market participants.