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And so the last dove prepares to fly the coop, and the end of an era of super-cheap liquidity comes into view.
The Bank of Japan has loosened its yield-curve control, the 10-year yield has surged toward its new ceiling and pulled the yen with it. Japanese government bond futures fell fast enough to trip a circuit breaker in Tokyo and the Nikkei lost 2.8%.
Soon-to-be-outgoing Governor Haruhiko Kuroda is due to speak at 0630 GMT to further explain himself. But markets have already taken the move as a step toward Japan extricating itself from yield curve control and near-zero interest rates.
And that would bring down the curtains for the last bastion of super-easy policy in developed markets, leaving investors to ponder a higher-for-longer world.
Asian shares spiked lower, the yen reached a four-month high on the dollar, while the yields on the 10-year Japanese bond hovered at 0.40% – just under their new roof of 0.5%. U.S. Treasury yields also jumped.
GRAPHIC: BOJ widens band around its yield cap (https://www.reuters.com/graphics/JAPAN-ECONOMY/BOJ/lgvdkkamdpo/chart.png)
Key developments that could influence markets on Tuesday :
Economic events: Germany producer prices for November, U.S. building permits and housing starts
