Pimco Sees BOJ Hike as Soon as January, Likes Long-Term JGB
- Yield curve remains steep and there are no duration needs
- Volatility is higher than before monetary policy normalization
The Bank of Japan (BOJ) headquarters in Tokyo.
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Pacific Investment Management Co.’s Japan unit expects the central bank to raise rates again as early as January and is ready to actively invest in ultra long-term government bonds, which have seen their yields rise to more attractive levels.
Despite geopolitical uncertainties and financial market instability in August, the Bank of Japan’s approach to normalize monetary policy has not changed, and “the next rate hike will be as early as next January,” said Tadashi Kakuchi, a portfolio manager at Pimco Japan Ltd., in an interview.