BOJ’s Hawkish Stance Seen Boosting Demand for US Corporate Bonds
- BofA sees hedging costs for Japanese investors falling further
- Lower hedging costs may drive demand for US high-grade bonds
The Bank of Japan raised its key policy rate last month to the highest level since 2008 amid projections for higher inflation.
Photographer: Akio Kon/BloombergThis article is for subscribers only.
Interest rate hikes from the Bank of Japan should help cut currency protection costs for Japanese investors, spurring their appetite for US investment-grade corporate bonds, according to Bank of America Corp.
The BOJ raised its key policy rate last month to the highest level since 2008 amid projections for higher inflation, fueling expectations for further rate hikes and a flatter yield curve for Japanese government bonds.