OK, so I’m reading this article in the Financial Times: BoJ strategy set to move US bond yields (gated – a news search on the headline may turn up something) that says as Kuroda buys longer-dated bonds
- He’s going to push yields on JGBs even lower than they are now
- Domestic investors, who own 92 per cent of JGBs, will look to pick up yield elsewhere
- US Treasuries the most obvious destination
- Thus selling yen and buying US dollars
“Domestic funds would effectively be intervening for them if they use proceeds to buy Treasuries.”
Hence the title of this post.
