Of late, traders should carefully watch what the Bank of Japan is doing with
the Japanese bond buying program without neglecting what it also says about the program.
You should pay particular attention to what the Bank of Japan has to say about
the Japanese bond buying program.
It is a known fact that
the Japanese bond buying program, or the quantitative easing as they call it in Europe, is the most intense program of its kind.
Not exact matches
But «investors» is a funny word these days of central - bank craziness: the entity that
buys every
Japanese government
bond that isn't nailed down is the Bank of Japan.
He said the Fed started quantitative easing, or
bond buying, but the
Japanese bank ran with it.
Speculative credit from U.S.,
Japanese and British banks to
buy bonds, stocks and currencies in the BRIC and Third World countries is a self - feeding expansion, pushing up their currencies as well as their asset prices.
Yet the currency is likely to remain weak as zero - anchored
Japanese 10 - year
bond yields encourage local investors to
buy higher - yielding foreign
bonds.
On the other hand, the Bank of Japan has announced that it will begin an «unlimited»
Japanese Government
bond buying program.
Just weeks after Haruhiko Kuroda, governor of the Bank of Japan, surprised the world with a bold plan to inflate
Japanese assets and weaken the
Japanese yen by
buying 80 trillion yen ($ 680 billion) in
Japanese bonds, exchange - traded funds and real estate investment trusts, prime minister Shinzō Abe upstaged him by calling a snap election for mid-December, two years ahead of schedule.
Huge
bond -
buying has swelled the central bank's balance sheet above 450 trillion yen ($ 4.4 trillion)-- equivalent to nearly a full year of
Japanese GDP.
The yield pick - up offered
Japanese investors an incentive to
buy U.S. Treasury
bonds, which is in addition to the portfolio diversification benefit.
In the short - run, the Bank of Japan's $ 660 + annual
buying binge of
Japanese government
bonds will likely continue to push up the price of
Japanese government
bonds.