BOJ Conducts Unlimited Fixed-Yield JGB Buying

Politics Economy

Tokyo, April 20 (Jiji Press)--The Bank of Japan on Wednesday offered to buy the newest 10-year Japanese government bonds unlimitedly at a fixed yield of 0.25 pct, in order to prevent a surge in long-term interest rates.

Amid soaring Treasury bond yields in the United States, the fixed-yield JGB-buying money market operation by the Japanese central bank may lead the yen to weaken further reflecting a wider gap in Japanese and U.S. interest rates.

The yield on the most recently issued 10-year JGBs, regarded as Japan's benchmark long-term interest rate, climbed to 0.25 pct in Tokyo interdealer bond trading Wednesday, following a rise in Treasury yields Tuesday stemming from expectations for acceleration in monetary tightening by the U.S. Federal Reserve.

The dollar topped 129 yen in foreign exchange trading Wednesday for the first time in about 20 years.

As part of its massive monetary easing policy, the BOJ is guiding the benchmark 10-year JGB yield to around zero pct while tolerating its rise to up to 0.25 pct.

[Copyright The Jiji Press, Ltd.]

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