JGBs Fall on Prospects of Faster Pace of BOJ Rate Increases
Dow Jones
Aug 17
0147 GMT - JGBs fall in price terms on prospects of a faster pace of BOJ rate increases. BofA Global Research's new base case is for the BOJ to accelerate to a roughly quarterly pace, with rate hikes projected for September and December of 2026 and for March and July of 2027, bringing the policy rate to 2%. Coordinated U.S.-Japan forex intervention has "raised the stakes around Japan's defense of the yen," says Shusuke Yamada, FX and rates strategist at BofA Global Research. "A sustained defense of the yen, however, requires a change in Japan's policy mix," says Yamada, who sees this adjustment likely happening via monetary policy. The JGB 10-year yield rises 5 bps to 2.925%, its highest intraday level since September 1996.
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