Bond prices are expected to fall on the 26th. Futures fell sharply in overnight trading following reports that the Bank of Japan would consider ways to reduce its purchases of government bonds at its monetary policy meeting. Higher interest rates in the US due to accelerating inflation also led to selling.
Kazuhiko Sano, chief fixed income strategist at Tokai Tokyo Securities, expects a decline in prices as he believes that the Bank of Japan meeting will discuss ways to reduce government bond purchases, as reported in some reports. He says, “We cannot deny the possibility that the Bank of Japan will take steps to reduce its balance sheet in consideration of the ongoing depreciation of the yen, and in that case, the market adjustment will be large.”
His expected yield range for newly issued 10-year government bonds is 0.91% to 0.97% (closed at 0.89% on the 25th), and the June futures contract is 143.16 yen to 143.88 yen (144.15% on the 25th). ).
Bank of Japan to consider measures to reduce scale of government bond purchases – Report
US GDP sharply slows down in January-March, inflation accelerates – dampening expectations for soft landing
In overnight trading, June futures ended at 143.78 yen, down 37 sen from the daytime closing price on the 25th.
Bank of Japan meeting
The Bank of Japan will announce the results of the decision meeting on the 26th.Monetary policy should remain the same It is expected. Amid growing awareness of inflationary pressures, including the effects of the weaker yen in 34 years, new economic and price outlooks and Governor Kazuo Ueda’s press conference provide hints for policy developments such as additional interest rate hikes and government bond purchases. I’ll have to find out.
Regarding the amount of long-term government bond purchases, it will be interesting to see if the footnote added to the statement from the March meeting stating that the amount is currently around 6 trillion yen per month will be deleted. Mr. Sano of the Tokai Tokyo Stock Exchange said, “After discussing reducing the balance sheet, I think they will delete the footnote of 6 trillion yen, suggesting a reduction in the amount of operations from May.”
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Tags: Bonds falling Bank Japan reportedly reducing purchases government bonds #U.S interest rates rising inflation accelerates Bloomberg
