Japanese bonds rally as investors seek havens ahead of BOJ decision
TLT•Japanese government bonds rose as investors sought safe-haven assets ahead of the Bank of Japan’s policy decision. The 10-year yield fell 5 basis points to 2.785%, while the 20-year yield slid 5 basis points to 3.620%.
1. Bond yields fall
Japanese government bonds rose on Friday as a selloff in technology stocks and cryptocurrencies boosted demand for safe-haven assets. The 10-year yield fell 5 basis points to 2.785%, the 20-year yield fell 5 basis points to 3.620%, and the five-year yield eased 4 basis points to 2.230%.
2. BOJ decision ahead
The Bank of Japan was expected to keep its policy rate steady at 1.25% after its two-day meeting. People familiar with the matter said the central bank was likely to slightly raise its inflation forecast and signal underlying inflation had roughly achieved its 2% target, implying scope for another rate hike as soon as December.
3. Economic data and market views
Tokyo core consumer prices rose 2.6% in October from a year earlier, slowing from 2.7% in September, while September factory output rose 2.2% from the previous month, above the 1.3% forecast. Daiwa Securities strategist Masahito Sugawara said JGB yields tracked lower U.S. Treasury yields, while Barclays Securities Japan strategist Shinichiro Kadota said the market had priced in almost no chance of a rate hike.
