The USD/JPY pair plunged to new lows as a result. Investors are waiting for the U.S. Federal Reserve Bank to release its latest inflation data later this week.
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Makoto Suzuki is the Chief Bond Strategist of Okasan Securities.
The 10-year bond yield could rise further, but selling is limited because investors do not have enough Japanese government bonds to sell due to the Bank of Japan’s large ownership in Japanese bonds.
Ueda didn’t reject the idea that the market fluctuations are now a formality, but he suggested that the best way to deal with the rising figures is by taking a quiet exit. Ueda stated in his first interview after April of this year that long-term rates are closely tied to the economic conditions and price levels. He said:
We do not intend to restrict the yields at a particular level in light of the recent depreciation. […] We will work with the government for a proper assessment of the impact on prices and the economy.