Japan’s two-year notes climbed, pushing yields to a record low, as a decline in domestic equities reinforced speculation the Bank of Japan will maintain its unprecedented debt purchases to sustain growth.
The yield dropped three basis points to 0.005 percent, declining past the previous low of 0.01 percent set in August 2002, after banks and exporters weighed on the Topix Index (TPX) and U.S. Treasury yields plunged earlier this week.
The central bank couldn’t buy all 3 trillion yen ($28 billion) of bills it sought to purchase today, falling short of its goal for such an operation for the first time since at least April 2013.
“The short-term notes were being absorbed by the BOJ’s buying operation to start off with, and then risk aversion on back of a sharp global bond rally pushed yields even lower,” said Satoshi Yamada, a manager of debt trading in Tokyo at Okasan Asset Management Co. in Tokyo.
The price of the 0.1 percent security due October 2016 rose 0.059 to 100.188 at 4:10 p.m. in Tokyo, according to Japan Bond Trading Co. The 10-year yield fell two basis points to 0.465 percent, lowest since April 2013, while five-year yields dropped two basis points to 0.125 percent.
BOJ Governor Haruhiko Kuroda is under pressure to expand monthly asset purchases of about 7 trillion yen after the International Monetary Fund last week said his 2 percent inflation target won’t be reached next year.
Excluding a sales-tax increase and fresh food, consumer prices rose 1.1 percent in August from a year before, the central bank said. The Topix fell 1.5 percent to a five-month low of 1,177.22. It has tumbled 13 percent from a six-year high on Sept. 25.
Operation Failure
The BOJ bought 2.62 trillion yen of Japan’s treasury-discount bills from financial companies today after offering to buy the securities with yields at 0.005 percentage point below market rates.
The central bank purchased a record 3.5 trillion yen on Oct. 3 as it pushed forward with record monetary easing to help increase the monetary base at an annual pace of 60 trillion yen to 70 trillion yen.
“The BOJ’s t-bill purchases were clearly big this month, and there’s little left in the secondary market,” Toshiaki Terada, Tokyo-based researcher at Totan Research Co., said by phone.
“The BOJ has to continue to buy bills at a rapid pace until at least November to achieve its monetary-base target.” Japan’s three-month treasury bill yield was minus 0.09 percent, while the six-month rate was minus 0.05 percent. A basis point is 0.01 percentage point.
bloomberg.com
The yield dropped three basis points to 0.005 percent, declining past the previous low of 0.01 percent set in August 2002, after banks and exporters weighed on the Topix Index (TPX) and U.S. Treasury yields plunged earlier this week.
The central bank couldn’t buy all 3 trillion yen ($28 billion) of bills it sought to purchase today, falling short of its goal for such an operation for the first time since at least April 2013.
“The short-term notes were being absorbed by the BOJ’s buying operation to start off with, and then risk aversion on back of a sharp global bond rally pushed yields even lower,” said Satoshi Yamada, a manager of debt trading in Tokyo at Okasan Asset Management Co. in Tokyo.
The price of the 0.1 percent security due October 2016 rose 0.059 to 100.188 at 4:10 p.m. in Tokyo, according to Japan Bond Trading Co. The 10-year yield fell two basis points to 0.465 percent, lowest since April 2013, while five-year yields dropped two basis points to 0.125 percent.
BOJ Governor Haruhiko Kuroda is under pressure to expand monthly asset purchases of about 7 trillion yen after the International Monetary Fund last week said his 2 percent inflation target won’t be reached next year.
Excluding a sales-tax increase and fresh food, consumer prices rose 1.1 percent in August from a year before, the central bank said. The Topix fell 1.5 percent to a five-month low of 1,177.22. It has tumbled 13 percent from a six-year high on Sept. 25.
Operation Failure
The BOJ bought 2.62 trillion yen of Japan’s treasury-discount bills from financial companies today after offering to buy the securities with yields at 0.005 percentage point below market rates.
The central bank purchased a record 3.5 trillion yen on Oct. 3 as it pushed forward with record monetary easing to help increase the monetary base at an annual pace of 60 trillion yen to 70 trillion yen.
“The BOJ’s t-bill purchases were clearly big this month, and there’s little left in the secondary market,” Toshiaki Terada, Tokyo-based researcher at Totan Research Co., said by phone.
“The BOJ has to continue to buy bills at a rapid pace until at least November to achieve its monetary-base target.” Japan’s three-month treasury bill yield was minus 0.09 percent, while the six-month rate was minus 0.05 percent. A basis point is 0.01 percentage point.
bloomberg.com
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