BOJ's Market Games and Yield Curve Control Tweaks Impact U.S. Bond Rout
The Bank of Japan's decision to allow its government bonds to float above the cap could potentially fuel a U.S. bond rout, as it may encourage Japanese investors, who are the largest foreign creditors of the U.S. government, to invest domestically. The 10-year U.S. Treasury yield rose to 3.968% following strong U.S. growth data, while Japan's stash of Treasurys has already decreased to its lowest level since early 2019.