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26 Mar 2013
Forex Flash: BoJ Kuroda Diet comments bolstered JGB market - BBH
FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that the new BoJ Governor juroda´s comments before the Diet bolstered the JGB market and the 10 year yield fell to now decade lows around 0.53%.
They see that he was sympathetic to merge the Asset Purchase Program (APP) with the ongoing rinban operation (monthly BOJ purchases of JGBs) and to scrapping the self-imposed BOJ rule that limits JGB holdings to the amount of banknotes in circulation. Essentially, they feel that Kuroda has reinforced market expectations for the April 3-4 BOJ meeting (no longer much talk of an earlier, emergency meeting) that the central bank will increase the amount and duration of its JGB purchases and may increase its purchases of riskier assets, such as REITS, as well. They finish by commenting, “Related, but separately, many expect the yen's weakness, on pause since earlier this month, will resume after the new fiscal year begins next week.”
They see that he was sympathetic to merge the Asset Purchase Program (APP) with the ongoing rinban operation (monthly BOJ purchases of JGBs) and to scrapping the self-imposed BOJ rule that limits JGB holdings to the amount of banknotes in circulation. Essentially, they feel that Kuroda has reinforced market expectations for the April 3-4 BOJ meeting (no longer much talk of an earlier, emergency meeting) that the central bank will increase the amount and duration of its JGB purchases and may increase its purchases of riskier assets, such as REITS, as well. They finish by commenting, “Related, but separately, many expect the yen's weakness, on pause since earlier this month, will resume after the new fiscal year begins next week.”