The Bank of Japan's rate hike signals ignite the bond market, yield curve experiences sharp fluctuations, and the market bets on this month's interest rate rising to 1%.
- Japanese government bonds weakened for a second consecutive trading day, nearly erasing all gains from Tuesday. The yield curve steepened for maturities within 15 years and then leveled out. Compared with three days ago, 2-year and 5-year yields have risen, while yields for maturities of 10 years and above have declined, mainly due to growing market expectations of a rate hike at this month's policy meeting. Bank of Japan Governor Kazuo Ueda said on Wednesday that the second-round effects of inflation triggered by rising oil prices are more likely to cause underlying inflation to persistently rise, making it necessary for the central bank to take this into consideration when implementing its policies.
- Ueda warned that if the central bank is slow in taking the necessary policy actions, it will be forced to raise rates sharply, which could place a significant burden on economic activity, markets, and the financial system. He believes that it is now more important to guard against the risk of inflation significantly overshooting expectations and subsequently having a negative impact on the economy, rather than worrying about downside risks to the economy. Institutions report that the Bank of Japan will consider raising rates to 1% at this month's meeting and may hike again before the end of the year. Following the announcement, the 10-year yield briefly touched 2.67%.
- Ueda emphasized that the functionality of the Japanese government bond market has steadily improved during the process of reducing bond purchases, with long-term yields increasingly determined by market forces. However, it will take time for Japanese banks and retail investors to increase their holdings of government bonds, and the central bank should take this into account when deciding on further reduction plans. The afternoon auction result for non-competitive bonds was weaker than expected, with the 30-year non-competitive bond yield rising by 6.5 basis points compared to yesterday, and selling intensified. However, spot bonds have already partly priced in the possibility of a rate hike, and futures quickly rebounded after hitting a daily low, showing that the market is digesting the new policy trajectory.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
BUZZ-Pacira BioSciences stock surges on Viatris' $1.65 billion acquisition deal
On October 8, Pacira BioSciences (PCRX.O) shares rose 44% in pre-market trading to $36.30 as Viatris (VTRS.O) announced it will acquire Pacira BioSciences for $1.65 billion in cash, at a price of $36.50 per share. This offer represents a premium of approximately 44.8% over Pacira's last closing price of $25.20. The transaction will add Pacira’s non-opioid pain medications Exparel and Zilretta to Viatris’ product portfolio. Both parties expect the deal to be completed by the end of 2026. As of the previous trading day’s close, PCRX was down 2.6% year-to-date.
BUZZ - Devon Energy shares rise after the company agrees to sell Eagle Ford assets for $4.2 billions
October 8 - Oil and gas producer Devon Energy (DVN.N) rose 2.65% in pre-market trading to $49.15. The company announced it would sell its Eagle Ford assets to Crescent Energy (CRGY.N) for $4.2 billions in cash. Devon's Eagle Ford assets include approximately 90,000 net acres in Texas, representing about 4% of its total oil equivalent production. This asset divestiture comes as the company, following its merger with Coterra Energy, faces investor pressure to streamline its asset portfolio and focus on its core Permian Basin business. The transaction is expected to be completed around the end of 2026. CRGY shares fell 2% to $13.20; the company also announced a $1 billions stock offering to raise funds for the DVN transaction. As of the previous trading day’s close, DVN shares had surged 30.71% year-to-date.
Kepler Weber executives trim stake by R$ 24,461.40 via on-market sales
Kepler Weber disclosed two cash equity sales by management totaling 3,788 shares for R$ 24,461.40 at an average R$ 6.45674. Transactions were executed via XP, with sales on day 1 at R$ 6.55 and day 16 at R$ 6.41. Disclaimer: This news brief was created by Public Technologies (PUBT) using generative artificial intelligence. While PUBT strives to provide accurate and timely information, this AI-generated content is for informational purposes only and should not be interpreted as financial, investment, or legal advice. Kepler Weber SA published the original content used to generate this news brief on October 08, 2026, and is solely responsible for the information contained therein.
BUZZ - Universal Display shares fall after Citi downgraded rating
On October 8, shares of OLED materials company Universal Display (OLED.O) fell by 4.5% in pre-market trading to $73.8. Citigroup downgraded Universal Display from “Neutral” to “Sell” and lowered its price target from $85 to $71. The new target price implies about an 8% downside from the previous closing price. The brokerage pointed out the continued weakness in the smartphone market and delays in the adoption of blue OLED technology. Citigroup also noted that high memory costs and weak demand for mid- and low-end smartphones may continue to drag down sales of OLED materials. Out of 10 brokerages, seven rate the stock as “Buy” or higher, and three rate it as “Hold.” The median price target is $117.5. As of the previous trading day's close, the stock had fallen a cumulative 33.88% so far this year.
Crypto prices
More
