Japan’s bond market will largely take in its stride any normalization steps by the central bank this year, according to a former finance ministry official known for his key role in reforming the management of Japanese government bonds.
"Japanese long-term yields won’t climb much beyond 1%, even if the Bank of Japan revises its yield curve control program or raises its short-term policy rate,” said Michio Saito, known as Mr. JGB, in an interview last week.
The demise of Japan’s negative interest rate won’t be followed by a series of aggressive hikes as seen in the United States and Europe, and that will keep a lid on 10-year yields, he added.