Japanese government bonds (JGBs) are bonds issued by the Japanese government and have become a key part of the country's central bank efforts to boost inflation. There are three key types of JGBs—general bonds, Fiscal Investment and Loan Program bonds, and subsidy bonds.
Why did the bank of Japan buy ten-year Japanese government bonds?
In 2013, the Bank of Japan began buying up billions of dollars of Japanese government bonds, flooding the economy with cash in an effort to propel the country’s low annual inflation rate toward its 2% target. To keep the yield on ten-year JGBs close to zero, a rise in the yield of these bonds triggers a buy action from the BoJ.
What is the yield of Japan 10Y Government Bond?
The Japan 10Y Government Bond has a 0.636% yield. Normal Convexity in Long-Term vs Short-Term Maturities. Central Bank Rate is -0.10% (last modification in January 2016). The Japan credit rating is A+, according to Standard & Poor's agency. Current 5-Years Credit Default Swap quotation is 16.10 and implied probability of default is 0.27%.
Should Japan reduce the market's role in determining bond prices?
Reducing the market’s role in determining the prices of those bonds, the Bank of Japan figured, would let it better control lending conditions. The mechanism for accomplishing that depended on one of a bond’s most fundamental attributes: Its price and yield move in opposite directions.
