Bond Traders Are Good at Sniffing Out Surprises
BOJ Governor Haruhiko Kuroda may have said that rate hikes are “unthinkable,” but he’s been known to change course unexpectedly.
A man of many surprises.
Photographer: Toru Hanai/BloombergBank of Japan Governor Haruhiko Kuroda's commitment to massive stimulus is being tested. Such is the conviction that inflation and rates will jump around the world that even Japan, which has wrestled with deflation, is seen as a worthwhile bet.
This week, yields on 10-year government bonds have climbed within a whisker of the BOJ's ceiling of around 0.25%, as traders speculate whether it will step in with a super-sized market intervention to keep levels from rising. Authorities haven't done so — yet. So the guessing about whether, when and how the bank expresses its displeasure with the situation continues.