The recent selling in Japanese bonds caused all sorts of volatility in the prior couple of weeks with equities and the yen both dropping on mounting concerns about Japan’s fiscal position. That was before the relative calm this week, where the selling of JGBs paused and yields held steady. But this could be a temporary respite. Elevated inflation means the pressure is growing on the Bank of Japan to normalise its policy, while the government under the new Prime Minister Takaishi Sanae aims to spending a whopping 21.3 trillion yen in fiscal package, financed by yet more issuance of debt. This is worrying some investors who are concerns that increased spending by the government could strain Japan’s finances. Indeed, according Japan’s Ministry of Finance data, foreign investors sold Japanese bonds last week to the tune of 956.5 billion yen, their largest weekly net sale since October 25. Should the bond market rout continues, this will push up Japanese yields and borrowing costs for the government and raise serious concerns about Japanese assets, and potentially trigger a reverse carry trade that could hurt global markets.
By Fawad Razaqzada, market analyst with FOREX.com
By Fawad Razaqzada, market analyst with FOREX.com
إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.
إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.