Will bonds rise? US long-term interest rates will fall sharply due to slowing CPI – Bank of Japan buying operations also supported – Bloomberg

2023-11-14 22:36:00

Bond prices are expected to rise on the 15th. This is a continuation of the trend in which long-term interest rates in the United States fell sharply as the consumer price index (CPI) growth in October fell short of expectations and the monetary authorities’ aggressive interest rate hike cycle was seen as coming to an end. The Bank of Japan’s regular government bond purchases are also likely to push up prices.

Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management, said yen bond futures have risen sharply due to lower U.S. interest rates, and he expects the market to start buying ahead of the curve. He said, “The 5-year government bond auction was well done the day before, and the ultra-long-term zone, which had been weak, is in good condition with some buying in the followingnoon.” He said that the ultra-long-term zone, where the Bank of Japan is expected to carry out generous operations, is likely to be particularly strong. I said.

His expected yield range for newly issued 10-year government bonds is 0.8% to 0.84% ​​(0.85% on the 14th), and the December futures contract is 144.90 yen to 145.25 yen (144.62 yen on the 14th). ).

US CPI slows in both core and aggregate in October – expectations for further interest rate hike recede

In nighttime futures trading, the December contract ended at 145.16 yen, up 54 sen from the daytime closing price on the 14th.

Bank of Japan operation

Regular purchases of government bonds are subject to remaining maturities of more than 1 year and less than 3 years, more than 5 years and less than 10 years, more than 10 years and less than 25 years, and more than 25 years.The previous purchase amounts were 425 billion yen, 675 billion yen, 200 billion yen, and 100 billion yen, respectively.

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