Institutions: The Central Bank of Japan approaching the neutral interest rate will push up the yield curve

On February 7th, Jinshi Data reported that BlueBay, the asset management department of the Royal Bank of Canada, believes that the Bank of Japan is lagging behind the curve and needs to reach a neutral level between 1% and 1.5% in the next year. This should raise the entire curve, especially the 10-year part that is currently artificially suppressed due to the Central Bank’s purchase operations. Starting from July, the Bank of Japan’s purchases of Japanese government bonds will be reduced. Nevertheless, we believe that the 30-year part of the curve is approaching fair value, at around 2.5%. Tradeweb data shows that the 10-year Japanese government bond yield rose 4 basis points to 1.304%, and the 30-year yield rose 1 basis point to 2.289%.