On Tuesday, the Bank of Japan (“BOJ”) ended its negative interest rate policy by lifting the interest rate by 10 basis points, from -0.1% to 0% — marking the first rate increase since 2007. They also abolished its stringent yield curve control, meaning it will now tolerate higher long-term rates.

In the build up to the BOJ’s announcement, the 10-year Yen swap rate, which had remained relatively stable, was observed to narrow the gap against nominal yields to reach 2022 lows. Despite the BOJ’s indication of maintaining its purchases of Japanese Government Bonds at “broadly the same amount” as before, the impact of short-term interest has evidently influenced the swap rate, as you can see in our data below.

At TraditionData, we have a suite of data products to help you navigate the Japanese markets. Visit our Japanese Government Bond page or our TONA OIS page to find out more.

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