BOJ Lifts Purchases for JGBs in 1-3 Year, 3-5 Year Maturities

The Bank of Japan (BoJ) is not making significant changes to its bond-buying strategy, despite liquidity issues in the Japanese government bond market. The BoJ plans to reduce the number of operations but maintain the purchase amount, which may disappoint market players expecting more tapering. The BoJ's actions have reduced market volatility and trading volumes, and while some expect yields to rise, most believe the changes are insufficient to restore price discovery. The market remains subdued, with limited trading activity in key bond maturities.

What is the Bank of Japan's approach to its bond market operations this month?

• They are significantly increasing the number of operations.

• They are maintaining the purchase amount despite fewer operations.

• They are introducing new types of bonds.

• They are drastically cutting back on bond purchases.

What was the effect of the Bank of Japan's policy tweak over the summer?

• It allowed for greater fluctuation in 10-year bond yields.

• It caused a significant rise in inflation.

• It resulted in increased bond trading volumes.

• It led to a decrease in bond yields.

How did market participants react to the Bank of Japan's recent changes?

• They believe the changes will restore market normality.

• They expect a significant drop in bond yields.

• They are optimistic about increased trading volumes.

• They are skeptical about the changes' effectiveness.

What is JP Morgan's stance on 10-year bonds in Japan?

• They suggest shorting 10-year bonds.

• They recommend buying 10-year bonds.

• They propose avoiding 10-year bonds altogether.

• They advise holding onto 10-year bonds.

What is the general sentiment among market players regarding the Bank of Japan's small changes?

• They are believed to stabilize the bond market.

• They are expected to boost trading volumes significantly.

• They are considered inadequate for market recovery.

• They are seen as sufficient to restore price discovery.