Market Extra: Bank of Japan announces unscheduled bond buying

The Bank of Japan surprised markets Friday with the announcement that it will buy $2.01 billion (300 billion yen) of five to 10-year bonds.

The yield on the 10-year Japanese Government Bond (JGB) yield
fell from 0.770% earlier in the session, to 0.765%. The country’s bond yields have climbed this year, having started 2023 at 0.415%.

Earlier in the session, the yield on the 30-year JGB
reached its highest since 2013, at a level of 1.73%.

The Bank of Japan shook up global markets in July when it altered its yield curve control policy, allowing the 10-year JGB yield to reach 1%.

Global bond yields have pushed even higher in recent weeks as investors price in higher-for-longer U.S. interest rates, which has weighed on global equity markets. The Nikkei 225 index
suffered its biggest monthly loss of 2023 for September, dropping 2.3%, according to FactSet.

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