Foreigners challenge BoJ yield curve control once again but Japanese investors have the BoJ’s back: The MUFG Global Markets Podcast

Currency intervention capped USDJPY at the 152-mark, but Yen selling flows dominate, and the uptrend for USDJPY has not been thrown off course. Upward stresses on JPY rates are deep-rooted, but the BoJ has been able to cap rates with its yield control operations. JPY bond arbitrage trading flows by foreigners and Japanese investors’ selling of foreign bonds have caused the belly of the JPY basis curve to tighten, but the front end has been dominated by Japanese investors’ funding of USD assets over year-end.

In today’s episode, MUFG Chief Japan Strategist Takahiro Sekido updates us on the cross asset flows during the month of September and also previews the October BoJ policy meeting. He also shares his views on spot Dollar/Yen, Yen rate, and Yen basis.

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