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Yields On Japanese Bonds Are Already Rising As Easing Ends

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TOKYO, March 22 (Reuters) - Bank of Japan Governor Toshihiko Fukui sought on Wednesday to soothe concerns about
higher long-term interest rates
that would hurt the government's efforts to rein in massive state debt.
Fukui told a parliamentary committee the central bank would continue to buy long-term government bonds in the market even after it finished mopping up excess funds from the banking system following the
scrapping of its five-year-old ultra-easy monetary policy announced earlier this month.
Yields on government bonds have been rising since the BOJ ended its "quantitative easing" policy on March 9 as the markets began to factor in a rise in short-term interest rates.
The yield on the benchmark 10-year JGBs briefly rose to a 19-month high
of 1.740 percent on Wednesday before pulling back to 1.725 percent by late afternoon.

We have been hearing this before for years about Japanese IR going up and they haven't--so far. It seems this time it IS different as the bond yields are proving. Once started, the momentum toward higher IR will follow naturally. We may have a few months to take defensive positions and should take the Japanese man with a rude name's apparent soft line as an early warning. Their economy is NOT our economy and what they see as gentle incrementalism in IR policy for the home market will have a ripple effect elsewhere--especially in those nations who have borrowed the most.

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  • 301 Brexit, House prices and Summer 2020

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      • down 5% +
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