Bets That Japan’s Central Bank Will Break Are Popping Up Across Markets
- Signs of stress are appearing in Japan’s bond, option markets
- Traders are betting BOJ will eventually have to tweak policy
This article is for subscribers only.
There’s more than just one hedge fund betting the Bank of Japan will cave in and change its increasingly isolated super-easy monetary policy.
Speculators pushed Japan’s bond futures to the brink of a trading halt Wednesday, as the central bank struggles to convince markets its pledge to cap yields at 0.25% is sustainable. Signals from the option market show bets on a tweak to its curve-control policy are mounting as the BOJ increases bond purchases to historic levels.