Japanese government bonds retain gains after BOJ sticks to its monetary policy

Japanese government bonds retain gains after BOJ sticks to its monetary policy

Japanese government bond prices steadied toward gains on Thursday following the Bank of Japan’s (BOJ) decision to stick to its policy targets and tweak its forward policy outlook. The gains had also benefitted from a rally in U.S. bonds after a Federal Reserve rate cut.

The BOJ kept its policy targets in short-term interest rates and 10-year bond yields unchanged at minus 0.10% and 0% respectively.

However, the impact of the announcement hardly changed the perception that the BOJ will have no choice but to keep dovish talks due to its limited policy ammunitions.

“No one has high expectations on what the BOJ policy can do. The market was driven by Fed’s move,” said NLI researcher, Yuuki Fukumoto.