Investors Bet on BOJ Policy Shift, Crowd into Bets Against Bonds on Expected Rule Changes
• Speculators betting on historic BOJ policy shift, expecting money markets to be upended by potential new deposit rules • Crowding into bets against short-dated bonds, yields rising sharply • Positioning is a bet that BOJ overhauls tiered deposit program charging banks for excess reserves • Investors assume banks will dump short-dated paper and keep excess cash at BOJ • Futures contracts show bets on BOJ ending negative rates, lifting overnight call rate to 0% or slightly above