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Aug 4, 2023 • 5 Min Read

Yield Curve Steepens

Over the past week, a flurry of news has led to a significant steepening in the yield curve. The key events:

Last Friday, the Bank of Japan (BOJ) signaled a more lenient approach to their Yield Curve Control (YCC) policy. While their target 10-year rate remains at 50 basis points (bps), they are now willing to let it drift as high as 1%. This announcement sparked fears that it could trigger a wholesale 50 bps increase in global 10-year rates. Additionally, the BOJ's decision means there will be more supply of Japanese Government Bonds (JGBs) in the market, as they ...

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