Yields for 10-year Japanese government bonds have reached their highest levels in nearly 9 years. The Bank of Japan recently announced an adjustment in its stance for its yield curve control policy, leading to this increase. The yield for 10-year JGBs currently stands at 0.539%, marking the first time it has reached this level since September 2014. The BOJ stated that it will allow yields to fluctuate within the range of roughly plus and minus 0.5%, but will now conduct yield curve control with greater flexibility. This adjustment comes as Japan’s central bank held its benchmark policy rate at -0.1%.
In response to reports of the Bank of Japan allowing long-term rates to rise beyond 0.5%, the Japanese yen has strengthened against the greenback. Currently trading at 138.95, the yen has strengthened by 0.38%. The proposed change to the BOJ’s yield curve control policy would still maintain the rate ceiling but allow for moderate increases beyond that level. Under the current policy, the central bank targets short-term interest rates at -0.1% and the 10-year government bond yield at 0.5% above or below zero.
China’s housing ministry has announced plans to make it easier for people to buy property. This move shows a bolder approach from the housing ministry in relaxing property policies. Chinese property stocks such as Longfor, Country Garden, and Greentown China have experienced gains in response to this announcement.
Tokyo’s inflation rate has ticked up to 3.2% in July, surpassing the Bank of Japan’s target of 2% for the 14th consecutive month. The consumer price index in Tokyo rose by 3.2% year-on-year, slightly higher than the previous month’s rate of 3.1%. Core inflation, which excludes prices of fresh food, reached 3%.
Investors are eagerly awaiting the June data for the personal consumption expenditures price index, as it is a key indicator of inflation closely monitored by the Federal Reserve. Economists predict that core PCE rose 0.2% from the previous month and 4.2% from 12 months earlier.
Despite Thursday’s slide, stocks remain on track for a winning week, albeit with marginal gains. The three major indexes are holding steady as the trading week nears its end.
In after-hours trading, several stocks have experienced significant movements. Intel, the technology stock, saw a jump of 8% as investors celebrated its return to profitability and better-than-expected guidance. On the other hand, Ford, the automaker, slipped 1% despite raising its full-year guidance and beating second-quarter expectations. Roku, the streamer, added 8.5% following a better-than-expected quarterly report.
Overall, the financial markets are experiencing various developments, from rising bond yields in Japan to bolder real estate policies in China and significant after-hour stock movements. Investors and analysts continue to monitor these trends closely.