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4 Feb 2015
JGB’s turn volatile – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team shares that Japanese government bond markets have turned more volatile, with the 10-yr yield rising 40bp.
Key Quotes
“Despite a tight labor market, Japanese wage growth remains a key aspect of Abenomics that remains "missing in action." Real cash earnings fell 1.4% in December year-over-year.”
“Separately, reports suggest that the government is poised to appoint Harada to the BOJ to replace Miyao. Harada is perceived to be a dove and sympathetic to the reflation efforts. This reinforces market ideas that the BOJ will have to expand its QQE program again if it is to reach its inflation target.
“Japanese government bonds have turned more volatile. The benchmark 10-year yield rose to 40 bp today, doubling since January 20 and its highest yield since mid-December. A week or so ago, roughly $1.5 trillion of JGBs had a negative yield. Now only the bill sector does.”
“A rise in the Nikkei (2%) and the sharp rise in US Treasury yields yesterday encouraged some dollar buying against the yen. However, it stalled at JPY118. The JPY117.20-JPY117.80 range is likely to dominate the North American session.”
Key Quotes
“Despite a tight labor market, Japanese wage growth remains a key aspect of Abenomics that remains "missing in action." Real cash earnings fell 1.4% in December year-over-year.”
“Separately, reports suggest that the government is poised to appoint Harada to the BOJ to replace Miyao. Harada is perceived to be a dove and sympathetic to the reflation efforts. This reinforces market ideas that the BOJ will have to expand its QQE program again if it is to reach its inflation target.
“Japanese government bonds have turned more volatile. The benchmark 10-year yield rose to 40 bp today, doubling since January 20 and its highest yield since mid-December. A week or so ago, roughly $1.5 trillion of JGBs had a negative yield. Now only the bill sector does.”
“A rise in the Nikkei (2%) and the sharp rise in US Treasury yields yesterday encouraged some dollar buying against the yen. However, it stalled at JPY118. The JPY117.20-JPY117.80 range is likely to dominate the North American session.”