SMFG Urges BOJ to Map Post-June Rate Path as 10-Year Yield Hits 30-Year High
Updated
Updated · Reuters · Jun 2
SMFG Urges BOJ to Map Post-June Rate Path as 10-Year Yield Hits 30-Year High
3 articles · Updated · Reuters · Jun 2
Arihiro Nagata said the BOJ should pair a widely expected June rate hike with clearer guidance on further normalization, arguing that a defined path would help cap additional rises in long-term yields.
The call comes as Japan's 10-year government bond yield sits at a 30-year high and the yen has weakened back toward 160 per dollar despite heavy intervention.
Markets already price in nearly two BOJ rate hikes this year, and investors are watching the June 15-16 meeting for signals on both rates and the central bank's bond-buying plans.
On bond purchases, SMFG wants the BOJ to stop further tapering and keep monthly buying at about 2.1 trillion yen from April 2027, a level Nagata said would avoid market stress while improving market function.
The policy debate is complicated by Middle East-driven energy costs, which are lifting inflation even as they weigh on Japan's import-dependent economy.