@ircrp 20 December 2022

Did you know that last night, the Bank of Japan (BoJ) announced that it will allow 10-year Japanese government bond (JGB) yields to trade within a wider range of -0.50% to +0.50%, up from the previous range of -0.25% to +0.25%? This change in policy is seen as a potential shift in the BoJ's monetary policy stance and is expected to cause some market volatility. It may also affect the flow of capital from Japan, as Japanese investors have traditionally looked abroad to invest their excess savings, attracted by positive yield differentials and the ability to hedge against currency risks. The widening of the JGB yield range may make it less attractive for Japanese investors to invest abroad, potentially leading to changes in the global market.