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00:00[CC may contain inaccuracies] Is the Bank of Japan winning the battles to maintain yield curve control. Because we keep talking about how sustainable this policy is. When the Fed is so aggressively looking to tighten. So far so good. Not only is the Fed looking aggressively to tighten. Bank of Japan governor how do he CAC really dug in his heels at the last few OJ meeting saying there's no need to move stimulus. They don't have to change anything just because other central banks are raising rates. So this is where they are at the beginning of the week of the BOJ and announce this three day bond purchase operation because the the 10 year JCB yield which is supposed to be capped at zero point to five percent when you look to the upside was was pushing up and getting closer and closer and closer yen sliding as well. And so yesterday was day two and the DOJ did two things to make this more dramatic. They did larger bond purchases a little bit longer tenor longer yield tenor that is they came in earlier than expected. And what did you get that JCB yield had pushed up to zero point two 5 3 percent just going over the top. It fell as low as zero point 1 9 5 percent. It closed around a point two to one. So they did seem to have success at least for the day. Meanwhile the yen surged a full percent against the dollar as the VOA OJ conducted these bond buying operations. And as word got out that Governor Kuroda was going to be meeting with Prime Minister Kishida. And what came out of this was corroded basically say well we talked about the explain to him global economic conditions domestic economic conditions. And in answer to a question about their operations he said that each market operation bond buying operation that is doesn't directly affect foreign exchange rate. He's downplaying the impact they are having by making it so clear to the world that they are not going to let their benchmark 10 year old rise even as benchmark 10 year yields rise in the US and as other central banks raise their rates. So it's interesting. I think people are saying there was also some profit taking on people who had the the profitable side that sell the yen trade. There was some conjecture that maybe Ukraine was going to ease up. Commodity prices won't look so threatening. And of course don't forget Gerri in the last couple of days the comments from the finance minister from their chief currency official is that the chief currency official saying he had talked with his U.S. Treasury counterpart about exchange rates. They're making it clear they're watching this closely. They care about what's going on and they're going to make sure they keep things under control. That's the message I get here.

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Bank of Japan Seen Winning Bond Market Battle

Bank of Japan Governor Haruhiko Kuroda is sticking to his guns when it comes to capping long-term bond yields even as the central hank launched a 3-day bond buying program that has been adding steam to the yen's recent slide. Kathleen Hays reports on "Bloomberg Daybreak: Asia." (Source: Bloomberg)

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