The whale is the Bank of Japan, of course
Bank of America Merrill Lynch and Mizuho Securities say BOJ purchases of government bonds may halve next year
- From the current target of 80tln yen to 40tln yen
BoA/ML:
- to about 60t yen this year as 43tln yen worth of BOJ's holdings come due within a year
- & to 40tln yen in 2018
Should BOJ stick to the 80t yen guidance, 10-year yield could slide to -0.4% by the end of next year, compared with the current target of zero
Mizuho:
- estimates 40t yen levels next year and to 30t yen levels in 2020
- Cites rising redemptions
- The expected slowdown will balance out with govt's issuance of new-financing bonds, keeping the amount of bonds in the market stable
via Bloomberg
Exclusive ForexLive pic of Kuroda buying JGBs
