Haruhiko Kuroda was endorsed by the lower house of parliament to become Bank of Japan governor, clearing the first hurdle in Prime Minister Shinzo Abe’s plan to install a central bank leadership in favor of more easing.
The yen’s drop against the dollar may be triggering early redemption of billions of dollars of structured notes tied to interest rates in the currencies, skewing swap rates as the issuers unwind their hedges.
Japan’s 20-year bond yields may drop to levels unseen since the collapse of Lehman Brothers Holdings Inc. in September 2008 as the Federal Reserve keeps interest rates near zero, Royal Bank of Scotland Group Plc. said.
Bank of Japan Governor Masaaki Shirakawa will step down on March 19, almost three weeks before his term was due, accelerating a leadership transition that may aid Prime Minister Shinzo Abe’s campaign for aggressive easing.
Japanese bond futures traded near a two-year high after reports showed the nation’s retail sales grew at the slowest pace since January and the U.S. economy expanded at a lower rate than previously estimated.