Robert Rennie, Research Analyst at Westpac, points out that we spent much of the last year questioning how long the BoJ would carry on adding to market confusion by maintaining a ‘redundant’ ‘about’ ¥80tn JGB outstanding holdings at the same time as a ‘vague’ ‘around zero’ 10yr JGB yield target.
Key Quotes
“Given the BoJ last hit ¥80tn in October 2016, we feel fully vindicated by what feels like a ‘trial balloon’ on the part of the MPB to gauge potential market reaction.”
“Clearly the market reaction would suggest that now is not a good time to stoke bond bears, with a potential trade war in the offing and US bond yields appearing well contained/ curve flattening still in play.”
“As such, we stick with our ‘neutral’ near term; more positive bias medium term bias.”
Share
