Printer Friendly

MOF sets 0.5% coupon rate for new 2-yr bonds, highest in 5 yrs.

TOKYO, Feb. 28 Kyodo

Japan's Finance Ministry said Tuesday it has set the coupon rate on two-year government bonds to be issued next month at 0.5 percent per annum, up 0.2 of a percentage point from the February issue and the highest level in five years and two months.

The rise reflects growing speculation that the Bank of Japan may scrap its five-year-old quantitative credit-easing policy at its Policy Board meeting March 8-9 or the next gathering April 10-11.

The coupon rate for two-year bonds -- which is heavily influenced by short-term interest rates effectively controlled by the BOJ -- had moved between 0.1 percent and 0.3 percent since the central bank introduced the quantitative easing policy in March 2001.

Under the unorthodox policy, the BOJ floods financial markets with excess cash to anchor short-term rates near zero in a bid to combat deflation and restore Japan's bad loan-laden financial system.

The No. 242 two-year government bond will be issued March 15 for maturity on March 15, 2008.
COPYRIGHT 2006 Kyodo News International, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2006 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Japan Weekly Monitor
Date:Mar 6, 2006
Previous Article:Dollar rises to mid-116 yen on buybacks after dropping on BOJ policy.
Next Article:Tokyo Stock Exchange: closing price list -1-.

Related Articles
Gov't lending rate to rise to 2.00%.
CORRECTED LEAD: Demand for JGBs drops only slightly despite...
Yield on key JGB issue jumps to 9-month high after auction.
3RD LD: Demand for 10-yr JGBs rebounds at auction.
Kyodo economic news summary -6-.
Kyodo economic news summary -2-.
Taiwan's Finance Ministry to buy back idle gov't bonds.

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters