BOJ Widens Scope of Fixed-Rate JGB Buying in Wed. Operations

Politics Economy

Tokyo, June 15 (Jiji Press)--The Bank of Japan on Wednesday conducted money market operations to buy an unlimited amount of Japanese government bonds at a fixed yield while widening the scope of target bonds.

The expansion of the scope of JGBs subject to the fixed-yield operations came as market prices of JGBs with a relatively short period until maturity, which have not been covered by the type of BOJ operations, fell sharply, leading to a spike in relevant interest rates.

Speculation has emerged mainly among foreign investors that the BOJ may change its current massive monetary easing at a time when the central banks in the United States and Europe are moving for monetary tightening amid rising inflation.

This prompted selling of JGBs, resulting in greater upward pressure on Japanese interest rates.

The BOJ's unlimited fixed-rate buying operations normally cover the latest and second- and third-latest 10-year JGB issues. The yield on the most recent issue is regarded as Japan's benchmark long-term interest rate. On Wednesday, the central bank added to the list of purchase targets JGBs with over seven years until maturity.

[Copyright The Jiji Press, Ltd.]

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