Following statements made by Haruhiko Kuroda, the Japanese Prime Minister Shinzo Abe's nominee for the position of governor of the Bank of Japan, Japanese bond yields have fallen.
The 10-year bond yield hit its June 2003 low of 0.6 per cent, while the 5-year bond hit a record low of 0.1 per cent. The yield implies the government's cost of borrowing (as the yield signifies the interest the government will have to pay).
“I would like to make my stance clear that we will do whatever we can do,” Kuroda, president of the Asian Development Bank, said at a confirmation hearing in the parliament in Tokyo today. The central bank hasn’t bought enough assets and should consider buying large amounts of longer-term bonds, he said.