Driven by a lack of selling, Japanese yields fell below zero for the first time since January. Two-year yields fell one basis point to minus 0.015 percent following the central bank’s move to purchase 520 billion yen in debt. “The market’s liquidity is thin, so even a little buying by the BOJ will cause markets to move easily,” said Makoto Yamashita, a strategist for Japanese interest rates at Tokyo’s Deutsche Securities Inc.
When speaking to parliament on Thursday, Japanese Governor Haruhiko Kuroda said that the BOJ may achieve its inflation target sometime in the 2016 fiscal year. The BOJ will have its next policy announcement on April 30.
Nuclear Draft
The Japanese government also announced this week its intent to make nuclear energy account from 20-22 percent of the country’s electricity mix by 2030, with renewable energy to account for slightly more. This marked shift away from nuclear power is not likely to be popular amongst Japanese citizens who have lived in fear of atomic energy since the three meltdowns at Tokyo’s Fukushima Daiichi plant in 2011. With the close of the power plants several years ago Japan has increased its coal production to record levels, causing a clash with Britain and the United States and increasing carbon emissions significantly.