by Brigid Riley and Kevin Buckland
TOKYO (Reuters) – The Bank of Japan (BoJ) intervened in the government bond market on Wednesday to curb the rise in yields which hit new 10-year highs, just a day after adjusting its bond control policy. the yield curve.
The yield on 10-year Japanese government bonds rose to 0.97% on Wednesday, a level last seen in May 2013, before falling immediately after the BOJ announced a bond operation. emergency bond purchase. It finished at 0.955%.
On Tuesday, the BoJ maintained its commitment to setting long-term yields around zero but redefined the 1% fluctuation band on ten-year yields as an “upper limit” rather than a fixed ceiling.
“They said okay, let’s let the market find a new equilibrium – but let’s remind the market that on the upper limit we can intervene,” observes Claudio Irigoyen, global head of economics at BofA Global Research.
While the rise in the 10-year yield was halted by the BoJ’s intervention, other parts of the curve continued to rise.
The five-year yield reached 0.485% after the announcement, a level not seen since April 2011.
The 20-year JGB yield reached 1.745% for the first time since July 2013, and the 30-year yield reached 1.915%, a level last seen in May 2013.
(Written by Brigid Riley; with contributions from Tom Westbrook and Vidya Ranganathan, Blandine Hénault for the )
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