Turbulence from BoJ policy bets shakes up market

Selective process: A pedestrian walks past the BoJ building in Tokyo. Speculation that the central bank will finally tighten policy is leaving the market exposed, leading to caution. — Bloomberg

TOKYO: Years of ultra-low rates have created an enviable position for borrowers in the yen bond markets, as costs have stayed relatively low and stable. Now, speculation that the Bank of Japan (BoJ) will finally tighten policy is leaving the market exposed.

Investor demand for corporate bonds is weakening, even as companies rush to raise money to take advantage of low rates while they still can. Some deals have been scrapped amid market volatility, and borrowers are exploring new pricing structures to attract money.