Investing.com - As the Bank of Japan (BOJ) prepares for its policy meeting on Friday, the yield on Japan's 10-year government bonds experienced a slight decrease. With market players keenly awaiting the BOJ's decision, the yield dipped by half a basis point to stand at 0.420%, even briefly reaching as low as 0.415%.
The central bank is predicted to uphold its ultra-accommodative monetary strategy while also projecting a gradual economic revival in the country. Investors are particularly interested in whether any adjustments will be made to the BOJ's existing yield curve control approach, which regulates fluctuations in 10-year Japanese Government Bond (JGB) yields.
Keiko Onogi, an esteemed JGB strategist from Daiwa Securities, highlighted that even if no changes occur after this week’s meeting, another opportunity arises with July’s assembly. Onogi also noted that despite today’s rebound in yields – driven by investors’ response to improved Japanese equities and weaker yen – foreign buyers had shifted their stance toward purchasing bonds rather than shorting them leading up to such meetings.
Data released by Japan’s Ministry of Finance revealed increased net purchases amounting to ¥186 billion ($1.7 billion) between June 4-10 after two consecutive weeks of selling activity among international traders.
Meanwhile, Japan's Nikkei 225 reached new heights unseen since over three decades ago due to sustained gains while simultaneously witnessing further depreciation within yen value against an increasingly robust US dollar—thanks primarily to indications from Federal Reserve officials regarding potential interest rate hikes later this year.