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Bank of Japan 'stunned' the markets w/major shakeup to YCC. What it all means.

Eurodollar University

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Introduction

The Bank of Japan says that it wants the 10 year government bond yield to be around 0%. But recognizing that we live in a marketplace or that we operate it with a marketplace, the yield can move around positive or negative here and there. As of right now, the Bank of Japan's YCC range for the 10 year JGB is plus or minus 25 basis points. And what the authorities in Japan announced last night was that they're going to widen the trading ban to plus or minus 50 basis points. Big deal. Huge change. Clown world.

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