Ueda’s YCC Tweak Fuels Bets That End to Negative Rates Is Near
- Investors turn attention to shakeup in short-term rates
- They also continue to hedge against a spike in yields
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The Bank of Japan’s looser grip on benchmark 10-year yields is starting to shake up the outlook for short-term borrowing costs, with swaps traders betting that the central bank will end the world’s last negative interest rate policy in as little as eight months.
This signals a profound change for investors in Japanese markets, which have labored under the policy since early 2016, when former governor Haruhiko Kuroda doubled down on a zero rates regime that had been in place on-and-off since 1999.