The Japanese Statistics Bureau released a critical report yesterday indicating that consumer prices had risen 1.2% year-over-year in March, prompting a panick on the Tokyo Stock Exchange. For the first time since 2002, trading was suspended for a full 15 minutes as panic spread accross the floor. When all was said and done, 10-year bond futures had plummetted 1.8%. Bloomberg:
“The market is in a bit of a panicked state,” said Masahiro Sato, joint general manager of the treasury division at Mizuho Trust & Banking Co. in Tokyo, a unit of Japan’s third- biggest lender. “I can’t say how far Japanese bond yields will rise, because they’ve already broken through my forecast levels and the selling pressure could snowball from here.”
The yield on the 0.8 per cent bond due March 2013 rose 19.5 basis points, the most for five-year notes since 1999, to 1.24 per cent as of 5:04 p.m. in Tokyo at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The price fell 0.887 yen to 98.973 yen. The yield was at the highest level since October 2007.
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