Japan’s bond ‘falling knife’ stalls repatriation rush
Major investors remain reluctant to commit heavily to domestic bonds while yields are still climbing and few clues about how much rates must rise.
The repatriation of Japanese assets abroad has commenced, yet uncertainty surrounding the peak of Japanese bond yields and the extent of additional rate hikes from the Bank of Japan is slowing the process. The central bank recently increased interest rates, expressed commitment to controlling inflation, and reportedly intervened in the foreign exchange market to prevent another surge of speculative attacks on the yen.
However, prominent investors are hesitant to heavily invest in domestic bonds while yields continue to rise and policymakers provide little insight into how much further rates need to climb. Two dissenting votes from relatively moderate officials during the latest Bank of Japan meeting and a subsequent drop in bond prices have further fueled this uncertainty.
Written by urgent.news from Japan Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
