The Bank of Japan took helicopter money off the table, and now Japanese bonds are getting smoked

Photo: Scott Barbour/ Getty Images.

Japanese bond yields are rising with the 10 year JGB back at levels not seen since before the Brexit vote in late June.

At -0.18% the 10 year still attracts a negative yield. But it’s 11 basis points higher than this week’s lower of -0.29% when talk of helicopter money and the issuance of 50-year bonds by Japans Ministry of finance had the bond bulls running.

Japanese 10 year government bonds (

The move higher in yield comes after the Bank of Japan appeared to deliver the minimum possible additional easing, in the form of increased ETF purchases, in today’s announcement.

More particularly relevant to bond traders was that the BoJ seemed to rule out any chance of so-called helicopter money in today’s statement.

Rather than commit to indefinite financing of the government’s stimulus package the BoJ said it was supporting government policy with “measures decided today to provide highly accommodative financial conditions”.

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