The Japanese yen has fallen to its weakest level against the U.S. dollar since August 1990.
Japan’s 10-year government debt yields broke above the 0.25% level that the country’s central
bank vowed to defend and hit 0.252%. The yield on the 20-year bond rose to its highest level
since 2015.
The Bank of Japan announced emergency bond buying in response, offering to purchase 100
billion yen ($666.98 million U.S.) worth of Japanese government bonds with maturities of 10-20
years and another tranche worth 100 billion yen with maturities of five to 10 years.
The central bank has said it will buy an unlimited amount of bonds at a fixed rate in order to cap
10-year government debt yields at 0.25% as part of economic stimulus measures.
The Bank of Japan has maintained low interest rates throughout this year to support the
country’s stagnant economy.
The central bank has already said that it won’t raise interest rates at its policy meeting next
week to further defend Japan’s weakening currency.
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