Haruhiko Kuroda and the Bank of Japan are trying to stop plummeting Japanese yields.
(Bloomberg) — The Bank of Japan intensified its efforts to stop benchmark yields from falling to record lows by cutting bond purchases on Friday and then paving the way to reduce them further in the coming month.
The central bank followed up on a 50-billion yen ($470 million) reduction in purchases of five-to-10 year debt this morning with a move to lower the buying range for this key maturity zone at its operations in September.
Speculation the BOJ would step in to halt the slide in yields was running highas the global debt rally caused the 10-year yield to drop further out of the central bank’s target range. Having come within one basis point of an all-time low of minus 0.3% on Thursday, the yield rose following BOJ’s actions on Friday, with that on similar-maturity U.S. Treasuries also moving higher.
On the other side of the Pacific Ocean, the US Federal Reserve has reversed course on letting their Treasury Notes and Bonds mature (unwind) and are letting their System Open Market Account rise for the second week in a row. Is this the start of QE4??
Kuroda and the Bank of Japan see no end in sight for plunging interest rates.