2023-12-27 22:33:00
Bond prices are expected to rise on the 28th. This follows the trend of lower long-term interest rates in the U.S. market as a result of strong demand for five-year bond auctions. The upside is likely to be limited due to concerns over the Bank of Japan’s policy revisions.
In an interview with NHK, Bank of Japan Governor Kazuo Ueda said that it is possible to make “a certain degree of advance judgment” regarding the timing of policy changes, even without complete wage data for small and medium-sized enterprises.
Bank of Japan Governor Ueda says policy decisions can be made before wage data for small and medium-sized enterprises is available – Report
Masayuki Oguchi, executive fund manager at Mitsubishi UFJ Asset Management, said that although the possibility of lifting negative interest rates in January 2024 is low, it is clear that the Bank of Japan is preparing for the lifting, and the bond market is expected to change. He says the topside will be heavy.
The Bank of Japan announced on the evening of the 27th its plan to purchase government bonds for the period from January to March, lowering the lower limit of its purchase range for medium- to long-term bonds and reducing the number of purchases of super-long-term bonds. Mr. Oguchi believes that the Bank of Japan’s reduced purchases will also be a factor in raising interest rates, which will “gradually take effect.”
Bank of Japan lowers the lower limit of medium- to long-term range of government bond purchases for January-March period – fewer purchases for ultra-long term
His forecast range for the yield on newly issued 10-year government bonds is 0.58% to 0.61% (closed at 0.595% on the 27th), and the futures-centered contract for March 2024 is 146.69 yen to 146.98 yen (146 yen on the 27th). 83 sen).
In nighttime futures trading, March contracts closed at 146.88 yen, up 5 sen from the daytime closing price on the 27th.
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