Japanese bonds got a double boost Monday as traders returned from a long weekend to find strong demand for haven assets, just as the central bank showed its determination to enforce yield-curve control.
The Bank of Japan offered to buy an unlimited amount of 10-year bonds at a fixed rate of 0.25% in a bid to cap the recent rise in yields. There was no take up from investors, given the benchmark yield slipped well below that rate in the secondary market to as low as 0.2%.
The plan was announced on Thursday and was the first of its type in more than three years. That news came shortly before U.S. inflation data sparked a renewed selloff in global bonds, only for them to recover on Friday as central banks pushed back on rate-hike speculation and tension over Ukraine increased.