The Bank of Japan is fighting an increasingly lonely battle. So far it has beat back speculators testing its resolve to keep interest rates low. But the market is betting that a plunging yen and rising inflation will eventually force its capitulation.
Bets that the Japanese central bank would follow its peers and raise rates this year have fallen flat despite the increasingly strong inflationary winds blowing. Futures on 10-year Japanese government bonds fell 1.4% last week but bounced back this week after the Bank of Japan bought a record 9.24 trillion yen of government bonds last week, according to CEIC. The central bank reiterated its so-called yield curve control policy to cap 10-year bond yields at 0.25% at last week’s policy meeting.
Japan Faces Its Moment of Truth on Inflation Source link Japan Faces Its Moment of Truth on Inflation
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