Swap Bets on BOJ Policy Change Gather Pace to Breach Attack High
- Ten-year Japan swap rates climb to highest in eight years
- Surge in 10-year US yield has amped up pressure on bonds
The Bank of Japan (BOJ) headquarters in Tokyo.
Photographer: Toru Hanai/BloombergThis article is for subscribers only.
Global funds look to have stepped up their bets against Bank of Japan policy once more, to levels above those seen during the speculative attack on the bond market in mid-June.
Ten-year swap rates -- a popular tool for international funds to express a view on Japanese yields -- have broken above 0.6% to a more than eight-year high, well beyond the BOJ’s 0.25% line in the sand for benchmark bond equivalents. That’s a sign that at least some traders are betting Japanese authorities will be forced to capitulate on their policy of capping 10-year yields to help boost the economy.