Japanese government bond yields rose as investors positioned ahead of the Bank of Japan's upcoming policy announcement, according to the headline. The move reflects the market's effort to price in the possibility of a shift in the central bank's yield curve control framework or its approach to short-term rates after years of ultra-accommodative policy. Higher JGB yields narrow the rate differential with the United States and other developed markets, which tends to support the yen by reducing the carry incentive for funding in Japanese currency, while also pressuring domestic equities and interest-rate-sensitive sectors. Traders will focus on the wording of the BOJ statement, any changes to bond purchase guidance, and the subsequent press conference by the governor for clues on the pace of future normalization. Positioning in JGB futures and yen crosses against the dollar is likely to be closely watched around the announcement.
JGB YIELDS MOVE HIGHER AS INVESTORS AWAIT BOJ POLICY ANNOUNCEMENT - WSJ
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