Banks are sticking with forecasts for a weaker yen, even as they see less chance of extra Bank of Japan stimulus, citing a weakening relationship between the currency and bond yields.
Japan’s 10-year bond yields are likely to fall to fresh seven-year lows, JPMorgan Chase & Co. said, citing trading patterns.
Money market watchers say Bank of Japan Governor Haruhiko Kuroda risks crippling the foundation of the nation’s financial system to achieve his inflation target.
JPMorgan Chase & Co. said it hired Takafumi Yamawaki as chief rates strategist in Japan from BNP Paribas SA, as it aims to strengthen its fixed income and forex research department.
The failure of seven funding operations by the Bank of Japan is signaling expectations that policy makers will cut deposit rates.
Japan’s bonds gained for a second day as Europe’s sovereign crisis boosted demand for the relative safety of government debt.
Japanese bonds completed a second weekly gain as evidence global economic growth is losing momentum boosted demand for the safety of government debt.
Japanese government bonds rose, sending yields to the lowest in four months, as Treasuries surged following a surprise hold in U.S. monetary policy and as the Bank of Japan bought debt for the sixth time this month.
"This low volatility will probably continue until next summer, when the BOJ will be looking for an exit from stimulus at just the time the Fed is close to raising rates."
- Takafumi Yamawaki on Jul 10, 2014