TOKYO -- The Bank of Japan has begun loosening its long-lived tight control over the nation's bond market, gradually allowing the private-sector to determine prices. But the issuance of government bonds will not subside, creating the risk of an unexpected increase in interest rates during this transition.
Bonds
Risk of Japan interest rate spike increases as BOJ softens grip
Central bank's policy shift hands more control of bond prices to private sector
Escaping from the BOJ's domination of the JGB market has been a long-held dream by traders. But many are now more anxious than happy as that starts to become a reality. © Reuters
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