Analysis: Japanese Bond Market Volatility May Increase Approaching Fiscal Year-End

Deep News
Mar 03

According to a report from Mediolanum's Cathal Gaffney, liquidity in the Japanese Government Bond (JGB) market is anticipated to decline as Japan's fiscal year-end on March 31 approaches. The fund manager stated that this could lead to significant intraday price swings triggered by major news, particularly affecting the long end of the JGB yield curve and the Japanese yen. Regarding the Bank of Japan's meeting on March 18-19, he does not anticipate an interest rate hike but expects markets to monitor signals from committee members' comments ahead of the April meeting. Gaffney expressed his expectation for a rate increase, citing persistent inflation above the central bank's 2% target, driven by price increases from a weaker yen.

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