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Fear of BOJ Turning Hawkish Spurs 94% Jump in Shorter Bond Sales

  • Sales of bonds maturing in over five years plunged this month
  • Short-dated credit is less vulnerable to interest-rate action
Updated on

Growing expectations that the Bank of Japan will drop its yield-curve control policy sooner rather than later are triggering a 94% surge in sales of yen bonds with shorter maturities that are less vulnerable to future interest-rate action.

A possible future BOJ policy change would lead to bigger losses for debt with longer maturities. Sales of Japanese corporate bonds maturing in more than five years have plunged by more than half so far this month.