Japan’s benchmark 10-year bond yield fell toward 0.22%, moving away from the 0.25% implicit yield cap, after the Bank of Japan kept its ultra-easy monetary settings unchanged, signaling its resolve to support the economic recovery from the pandemic. The decision was widely expected, but leaves the BOJ’s stance even more at odds with other major central banks, which are aggressively tightening policy to curb surging inflation. The BOJ left its key short-term interest rate unchanged at -0.1% and that for 10-year bond yields around 0% at its June meeting. The board also said it would offer to buy unlimited amounts of the bonds to defend an implicit 0.25% cap every market day, repeating the guidance on market operations it made in April. Moreover, the central bank resisted market pressure on the yen and government bonds, amid earlier speculations mainly among foreign investors that the bank may tweak its current yield control policy.
Historically, the Japan Government Bond 10Y reached an all time high of 7.59 in June of 1984. Japan Government Bond 10Y - data, forecasts, historical chart - was last updated on June of 2022.
The Japan Government Bond 10Y is expected to trade at 0.25 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 0.33 in 12 months time.