The swap market is now pricing in about a 62% chance of a rate hike when BOJ delivers its next policy decision on Dec. 19, with the likelihood rising to almost 90% by its January gathering. That compares with 30% for a December move just two weeks ago. <\/p>\n
Separately, the Ministry of Finance plans to increase its issuance of short-term debt to help finance Prime Minister Sanae Takaichi\u2019s economic package, adding issuance of two- and five-year notes by \u00a5300 billion ($1.92 billion) each and Treasury bills by \u00a56.3 trillion. That\u2019s set to weigh on shorter-end sovereign bonds.<\/p>\n
It\u2019s \u201cprudent to remain cautious\u201d about bonds right now, said Ryutaro Kimura, senior fixed-income strategist at AXA Investment Managers. The market has to take into account \u201cthe anticipated re-acceleration of inflation under the fiscal expansion of the Takaichi administration and the deterioration in the supply-demand balance due to a substantial increase in medium-term JGB issuance.\u201d <\/p>\n
The mounting speculation of a December hike comes as the yen has slumped 5% against the dollar this quarter, making it the worst performer among Group-of-10 currencies. Japan\u2019s inflation has been consistently running above the BOJ\u2019s 2% target, fueling criticism that the central bank is behind the curve in raising rates. <\/p>\n
A two-year note auction late last week met weak demand, indicating how investors are cautious given the increasing rate hike risk.<\/p>\n","protected":false},"excerpt":{"rendered":"The swap market is now pricing in about a 62% chance of a rate hike when BOJ delivers…\n","protected":false},"author":2,"featured_media":209230,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[79,179,18,19,17,386],"class_list":{"0":"post-209229","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-eire","11":"tag-ie","12":"tag-ireland","13":"tag-japan"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115643099634980902","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/209229","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=209229"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/209229\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/209230"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=209229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=209229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=209229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}