The outlook for Japanese markets following the Bank of Japan’s surprise change to Yield Curve Control: The MUFG Global Markets Podcast

The Bank of Japan’s surprise monetary policy decision in December hastened a sell-off in the JGB market, a drop in Dollar/Yen, and a tightening of Yen cross-currency basis. The government’s FY23 budget has grown to JPY114 trillion causing upward pressure on JPY rates to likely persist. We suggest investors watch not only BoJ JGB purchases but also BoJ lending and pooled collateral operations. 

In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido dissects the December BoJ meeting, the monetary operations that followed, and what he expects going forward. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.

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