TOKYO: Japan’s 10-year government bond yield weakened and 10-year futures rose on Friday after the Bank of Japan (BOJ) kept its ultra-loose monetary policy unchanged.
The Bank of Japan maintained its ultra-easy monetary policy on despite stronger-than-expected inflation, as it focuses on supporting a fragile economic recovery amid a sharp slowdown in global growth.
The 10-year JGB yield fell 2.5 basis points (bps) to 0.400%.
The 10-year JGB futures reversed course to rise and last traded up 0.26 yen at 148.34.
“Right after the decision was announced, some investors bought futures to cover their short positions,” said Keisuke Tsuruta, fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.
Japan’s 10-year bond yield hits 1-week low on BOJ policy bet
“In the run-up to the policy meeting, some of them were shorting futures.”
At the end of the two-day meeting, the central bank also kept intact a pledge to “patiently” sustain massive stimulus to ensure Japan sustainably achieves its 2% inflation target accompanied by wage hikes. The five-year yield fell 1 bp to 0.075%.
Bonds in other tenors have not been traded yet.
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