Negative dynamics of the Japanese bond market | 01 February 2022

01 February 2022, USD/JPY

Negative dynamics of the Japanese bond market

USDJPY trading plan:

Benchmark 10-year Japanese government bond yields climbed to their highest since the start of the Bank of Japan's negative interest rate policy six years ago, as investors pondered whether the central bank will be swayed by policy tightening in the United States and elsewhere. The 10-year JGB yield rose as high as 0.185%. The BOJ's yield curve control policy pegs the benchmark yield in a 25 bp band either side of zero. Ahead of an exit of stimulus, the BOJ is likely to shift its yield curve control target from the 10-year to the five-year JGB, noting the rise in the five-year yield towards zero this month.

Investment idea: sell 115.25 and take profit 114.75.

David Johnson
Analyst of «FreshForex» company
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