The Bank of Japan expanded its monetary policy a few weeks ago.
For several years, it has made a 10-year Japanese sovereign interest rate of 0.0% one of its monetary policy objectives. But this target has a tolerance band, recently expanded to 0.5%. This means that 10-year Japanese rates should not, in theory, exceed 0.5% and that, in all likelihood, the Bank of Japan will intervene to defend this ceiling if that is the case.
However, this ceiling is being tested by investors, with Japanese debt approaching 0.55% during the session – the highest since 2015 – before retreating.
Investors are betting that Japanese key interest rates will be raised shortly and that these measures to control the yield curve will be further relaxed or wholly abandoned in the coming months.
As many issues as possible, which would not fail to promote a revival of a yen still undervalued mainly on the foreign exchange markets, both against the euro and against the US dollar.
We continue to Invest in Japanese assets according to the investment portfolio below.