Boj Keeps Long - Term Interest Rates From Rising
The Bank of Japan has bought a large amount of government bonds this week and has successfully kept long-term interest rates from rising.
The BOJ wrapped up its first consecutive unlimited bond buying operation at a yield of a quarter of a percent on Thursday. The central bank also increased regular bond purchases by 2.5 times to buy 2.3 trillion yen or nearly 19 billion dollars of JGBs on Wednesday.
When bonds are bought on the market, their prices go up and their yields come down. The BOJ's action resulted in the lowering of the 10-year yield briefly to 0.21 percent on Thursday.
The yield hit the bank's cap of 0.25 percent earlier this week as traders had been selling JGBs on the assumption the US Federal Reserve would accelerate its credit tightening.
The BOJ says it will continue to take the necessary steps to keep long-term rates below its target level.