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DB 3x Inverse Japanese Govt Bd Futs ETN Message Board

  • jackmaster20 jackmaster20 Apr 14, 2013 9:16 PM Flag

    BOJ will buy JGBs.......

    The BOJ will buy more JGB to increase the money supply in Japan.
    Will not this gov't buying keep a bid for JGB in the open market ?

    BOJ will buy other securities, but like the USA MBS market, major
    government buying action should support/maintain the Japan Bond
    Market in the near term.

    BOJ prices have seen increased price volatility.......but the JGB
    prices, net, haven't moved materially higher so far.

    USA MBS market = JGB market ?

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    • It's like this, bond yields on JGB's are practically zero therefore the only reason someone would buy a JGB is because they foresee absolutely no inflation and perhaps the yen reversing it's decline and strenghtening. Why would it do that ? Well, money could flow back into the country if investors feel that they want to invest in Japan. This is a huge gamble. Either investors go all in, doubling down on a losing bet that has not paid off in 20 years or they bail out. If bond creditors lose faith that Japan's massive stimulus will not make Japan a more productive nation then they may lose faith that they will ever be paid back in a valuable currency and they stop lending. That's when interest rates rise and the whole house of cards comes crashing down.

    • help out this bond neophyte... if the bond yield on the #$%$ 10 year increases like it did today why is jgbd down .61 ?

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