John Normand: A BOJ JGB Change 'Very Positive for Yen'

The video discusses the Bank of Japan's (BOJ) potential strategy to widen the range of average maturity in its purchases, impacting the Japanese yield curve and global markets. It explores the implications of rate changes, particularly on Japanese and non-Japanese fixed income markets, and the potential for a Fed rate hike. The discussion also covers the ability of policymakers to influence currency markets and the historical context of Abenomics, highlighting the challenges faced by central banks in reflating economies. The video concludes with an analysis of the repatriation of funds to Japan and its effects on pension funds.

What is the potential impact of the BOJ widening the range of average maturity in its bond purchases?

• It will decrease the steepness of the yield curve.

• It will cause the yield curve to flatten.

• It may lead to a steepening of the yield curve.

• It will have no effect on the yield curve.

How might changes in the BOJ's policy affect non-Japanese fixed income markets?

• They will benefit from the changes.

• They could be negatively affected.

• They will have no impact.

• They will experience increased stability.

What is a challenge for policymakers trying to reflate economies with currency strategies?

• There is no historical precedent for success.

• All economies are growing rapidly.

• Every economy is stagnating or growing close to trend.

• Currency strategies are universally effective.

Why did the yen strengthen during the Abenomics experiment?

• Japan lost its current account surplus.

• The Fed became extremely dovish.

• The ECB followed a similar policy.

• The BOJ increased interest rates.

What could be a positive outcome for pension funds if the ECB follows the BOJ's lead?

• A decrease in yield curve steepness.

• A reduction in pension fund returns.

• A rise in yields and steepened curve.

• An increase in savings discouragement.