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21 May 2013
Flash: BoJ meeting concludes soon with no new initiatives expected - BBH
FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that the BOJ's two-day meeting concludes tomorrow and no fresh initiatives are expected.
They feel that the chief concern presently is the volatility of the government bond market, an unintended and seemingly unforeseen consequence of what it calls the qualitative and quantitative easing. They see that the yield on the 10-year JGB rose 3 bp and continues to flirt with the 90 bp level, which compares with a yield of about 55 bp just before Kuroda announced the BOJ was going to buy 70% of the new issuance. They write, “The backing up of long-term yields in Japan did not bring in new buyers at the 40-year auction earlier today. The bid-cover ratio was the lowest in almost 2 years. “
They feel that the chief concern presently is the volatility of the government bond market, an unintended and seemingly unforeseen consequence of what it calls the qualitative and quantitative easing. They see that the yield on the 10-year JGB rose 3 bp and continues to flirt with the 90 bp level, which compares with a yield of about 55 bp just before Kuroda announced the BOJ was going to buy 70% of the new issuance. They write, “The backing up of long-term yields in Japan did not bring in new buyers at the 40-year auction earlier today. The bid-cover ratio was the lowest in almost 2 years. “