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Bank Of Japan Intervenes Again


The Bank of Japan announced on Monday an unlimited purchase of 10-year Japanese government bonds at the 0.25% level to curb the upward trend in long-term interest rates. This is the second time the central bank has entered the market to intervene in less than two months. The action may reflect the central bank's determination to maintain an ultra-loose monetary policy, which is clearly at odds with the Fed's intention to tighten monetary policy to suppress inflation. The Japanese yen fell sharply to the "Kuroda Haruhiko bottom line" of over 125 to the dollar at one point (BoJ Governor Kuroda Haruhiko said in 2015 that a weaker yen below 125 would affect the economy). However, given the recent sharp fluctuations in the yen, the market is also concerned about the Japanese authorities or intervention in the foreign exchange market.
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