Bank Of Japan Intervenes, Boosts Bond Buy Ahead Of Fed Decision

Having seen 10Y JGB yields spike to 10bps (highest since Feb), The Bank of Japan has decided enough is enough and intervened to bring yields back to the stable 0.00% level they decree as fair. The entire Japanese curve is bull-flattening as the long-end is also rallying after Kuroda and his cronies up their purchases to 200 billion yen, from 190 billion previously. All else equal, this will prompt more demand for US paper from Japanese sources.

10Y Yields had risen to their highest since Kuroda unleashed NIRP.

 

And so it was time to step in

 

And the 30Y rallying even more

 

As Bloomberg's Mark Cranfield noted, The Bank of Japan is back in the JGB market. Yields sliding across the longer end of the bond curve as the BOJ buys super longs. If the Fed does a dovish hike later today, that could be the end of rising yields for this year.

This move also follows Jeff Gundlach's earlier bond bull case, noting that he's increasing duration and investor fear of bonds seems to be getting overdone.

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