04/10/18

JGB Market Enters "Uncharted Territory" As Bond Rout Goes Global



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JGB Market Enters "Uncharted Territory" As Bond Rout Goes Global
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After today's US Treasury rout which sent the 10Y yield as high as 3.20%, all eyes have turned to Japan where the BOJ has been already actively signaling it is tapering purchases on the long end following a couple of announcements that it is shrinking the size of the 25 year+ rinban bucket.

And sure enough, it didn't take long for JGBs to get routed, with the 10Y bond yield first rising to 0.145%, the critical support level that was hit on August 2 when  when Japanese bonds were sent on a wild rollercoaster ride, culminating with the BOJ surprise offer to buy JPY 400BN worth of bonds. And as panicked traders looked on, hoping for some Kuroda to step up, there was no intervention tonight, and predictably yields resumed moving higher, rising as high as 0.153%.

This was the highest yield since January 2016.

This was the highest yield Today's push higher in Japanese yields also came after 10-year ....

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