Dow Jones Newswires: Japan financial stocks surge after BOJ loosens yield control

by | Dec 20, 2022 | Stock Market

Japanese financial stocks rose sharply Tuesday after the Bank of Japan loosened its grip on the yield curve, allowing it to shift higher. Mitsubishi UFJ Financial Group Inc.
8306,
+5.98%
shares were recently 5.9% higher at 818.0 yen ($5.97) and Dai-ichi Life Holdings Inc.
8750,
+9.42%
shares were up 8.8% at Y2,869.0.

The Bank of Japan said Tuesday that the 10-year Japanese government bond yield could now move freely between -0.5% and 0.5%, wider than the previous range of between -0.25% and 0.25%. The 10-year JGB yield
TMBMKJP-10Y,
0.401%
was recently at 0.435%, up from 0.250% prior to the BOJ’s announcement. Higher government bond yields mean banks and insurers can charge higher interest rates on commercial loans and earn better yields from bonds and other financial investments. The Japanese central bank had capped the 10-year JGB yield around 0.25% by conducting bond-buying operations in recent months. Bond yields have risen sharply around the world as a recovery from the Covid-19 pandemic and the Russia-Ukraine war caused a surge in inflation. Write to Kosaku Narioka at kosaku.narioka@wsj.com

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