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The costs of the BoJ’s policy shift for investors

The jump in bond yields and the further strengthening of the yen following the widening of the Bank of Japan’s tolerance band for 10-year JGB yields will lower the value of assets owned by Japanese investors. Insurance firms will be most affected by falling bond prices, whereas pension funds have most to lose from a stronger exchange rate. However, we doubt that lower investment returns carry systemic risks.

Japan Drop-In (21st December): The BoJ has shaken up markets with its surprise yield curve control announcement. Do the changes point to a shift in its monetary stance and what will they mean for Japanese and global markets? Join this special 20-minute briefing at 0800 GMT/1600 SGT on Wednesday. Register here.

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