Think the Fed is bad? With the Bank of Japan vacuuming up the supply thanks to its own QE program, the government's new issue of 10-year JGBs looks like its going to go 24 hours without even a single trade. Typically, recent issues are the busiest traders, but the BOJ is buying about ¥7T of JGBs per month, roughly 70% of all new issuance. With rates so low and supply scarce, traders say sitting on the sidelines is less costly than trading.
Don't expect the market to stay asleep for long, says traders, with one expecting a big jump in yields rather than a slow creep upwards. 10-year JGBs currently yield 0.61%.