Investors are getting so desperate to lighten their holdings of Japanese government bonds that some are willing to sell the securities at a discount to the central bank.
At the Bank of Japan’s regularly scheduled bond buying operation on Aug. 14 and Aug. 20, something unusual happened: the operations’ lowest accepted yield matched the accepted average.
That’s rare because bondholders usually try to sell securities at the highest price possible, resulting in a lower yield. But in this case, the lowest yield has climbed to levels in line with the average, suggesting the price is cheap.
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