Forex Analysis by MarketPulse (Kelvin Wong) covering: USD/JPY, EUR/JPY, GBP/JPY, AUD/JPY. Read MarketPulse (Kelvin Wong)'s latest article on Investing.com
A further rise in the JGB yields may increase the cost of JPY-funded carry trade strategiesA lower-end offered amount of 425 billion yen for BOJ’s scheduled bond-buying programme on 31 May for JGBs with residual maturity of 5 to 10 years may see a further rally in JGB yieldshas continued its tepid ascend and almost hit 158.00 key short-term resistance level .
Despite the ending of BoJ’s “Yield Curve Control” programme on the 10-year JGB yield announced on its 19 March 2024 monetary policy meeting, it has left a little “caveat” on its new monetary policy framework by stating that it will continue its JGB purchases with broadly the same amount and may increase the amounts if there is a rapid rise in long-term interest rates.
Similar movements can be seen for the 30-year JGB yield that rallied to 2.20%, and the 2-year JGB yield that is more sensitive to BoJ’s short-term policy rate hit a 15-year high at 0.38% from a mere 0% at the start of 2024 . On Friday, 31 May, BoJ will hold another auction on its JGB buying programme for more than 5 years to 10 years range of residual maturity, if the offered amount comes in again at the lower end of the range , and also with the possibility of a newly announced lower low-end amount range for the 5-10 years and 1-3 years JGB purchases per operation listed for the scheduled dates of June.
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