Bond Traders Challenge BOJ With Biggest Futures Rout Since 2013
- Bets mount on the BOJ tweaking its yield-curve control policy
- BOJ purchases widened to cover futures-linked JGB zone
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The showdown between bond traders and the Bank of Japan is rapidly escalating as the central bank struggles to convince markets that its ultra-loose monetary policy is sustainable.
Ten-year bond futures slumped by the most since 2013 on Wednesday, with traders betting that the BOJ will be forced to abandon its pledge to cap yields at 0.25%. The selloff persisted even after the BOJ ramped up its bond buying program, announcing unlimited purchases of so-called cheapest-to-deliver 10-year bonds for Thursday and Friday.