As Treasuries see their worst selloff in a year, a money manager says one catalyst to stop the rout will be the Bank of Japan coming out strongly to defend its yield curve control.
The Treasury rout is in part explained by moves in Japanese sovereign bonds, an anchor for global rates, said Adrian Janschek, who helps oversee A$10 billion at First Sentier Investors in Sydney. If the BOJ stands firm when 10-year JGB yields reach its 1% limit, that will send a reassuring signal to investors everywhere, he said.
Speculation that the BOJ, the last major central bank with negative rates, will turn hawkish has rippled through global bond markets. Traders fear that a potential end to Japan’s ultra-easy policy will tighten global liquidity while triggering a massive repatriation of Japanese funds from other parts of the world.
Meanwhile, JGBs saw their biggest quarterly rout since 1998 as investors geared up for an eventual normalization by the central bank. While the BOJ stepped in on Friday with unscheduled bond purchases to slow the moves, the benchmark 10-year yield still rose one basis point on Monday to 0.775%. While US yields are attractive, they will climb higher if Japanese bond yields head to 1%, Janschek said. “Certain things have to be put in place for the market to get confident about stepping in front of what looks to be a bit of a freight train,” he said.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Distribution of free signal-blocking pouches in York Region a success, police sayThousands of residents in York Region have received free pouches that could help fend off car thieves, York Regional Police said.
Read more »
Slumping Lithium Prices Signal Angst Over China’s Demand Outlook(Bloomberg) -- Lithium prices are spiraling down toward the lowest level in two years on concerns over the strength of Chinese demand for the material, a key ingredient in electric vehicle batteries.Most Read from BloombergOnce Unthinkable Bond Yields Now the New Normal For MarketsCongress Averts US Government Shutdown Hours Before DeadlineMcCarthy to Face Far-Right Attempt to Oust Him as House SpeakerSenate Voting on Bill to Avert US Government ShutdownWhy a US Recession Is Still Likely — and C
Read more »
Slumping Lithium Prices Signal Angst Over China’s Demand OutlookLithium prices are spiraling down toward the lowest level in two years on concerns over the strength of Chinese demand for the material, a key ingredient in electric vehicle batteries.
Read more »
Can Bert, 62, and Lois, 63, afford to retire and buy a vacation property?The couple should be able to meet their spending goal of $120,000 a year after tax, even if they make a one-time outlay for a down payment on a vacation property
Read more »
You can buy an entire apartment building in Toronto for $7.5 millionMost people don't have $7.5 million to spend, but if you did, you could either get a very very nice house, or an entire apartment building in South...
Read more »