The Bank of Japan said it would increase scheduled bond purchases as an intensifying Treasuries selloff pushed up global yields and weakened the yen.
(Bloomberg) — The Bank of Japan said it would increase scheduled bond purchases as an intensifying Treasuries selloff pushed up global yields and weakened the yen.
The BOJ said it would buy 550 billion yen ($3.8 billion) of five-to-10 year debt at its regular operations, up from 500 billion yen scheduled. The decision came as Japan’s benchmark 10-year yield approached the 0.25% upper limit of the central bank’s tolerated range, trading at 0.24% Tuesday.
The BOJ carried out a similar operation last week.
Japan’s bond market had previously come under heavy selling pressure in June when only unprecedented BOJ buying kept benchmark yields below the 0.25% ceiling. BOJ Governor Haruhiko Kuroda has emphasized his determination to stick with rock-bottom interest rates even as global peers hike to tackle accelerating inflation.
Treasury yields jumped on Tuesday after US consumer prices exceeded forecasts last month, boosting speculation on another super-sized Federal Reserve rate hike. The yen fell toward the closely-watched 145 level against the dollar, sparking further verbal intervention from Japanese officials.
Yen Eyes a Break of 145 as Verbal Intervention Intensifies
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