Goldman Sachs The Markets
What the BoJ’s latest move means for global yields
Nov 3, 2023
Discussion on major decisions by central banks, the impact of Japan's negative yield posture on global bond yields, analyzing the impact of rebalancing on inflation, and analysis of recent corporate earnings and outlook.
09:29
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Quick takeaways
- The Bank of Japan's increased flexibility in its yield curve control program and potential exit from negative interest rates may have spillover effects on global bond yields and encourage capital repatriation.
- Achieving a better balance between labor demand and supply in the US labor market is crucial for sustainable wage growth and inflation, highlighting the need to rebalance the labor market to alleviate inflationary pressures.
Deep dives
Central bank actions and their implications
The podcast discusses recent decisions by major central banks including the Bank of Japan, the US Fed, and the Bank of England. The Bank of Japan increased the flexibility of its yield curve control program while revising its inflation projection upwards, hinting at a potential exit from negative interest rates. The US Fed left interest rates unchanged, leading to a positive market reaction in US treasuries. The implications of these central bank decisions include potential spillover effects on global bond yields and the repatriation of capital by Japanese investors.
