Why are Japan 30Y bond yields decreasing?
having a bit of a brain freeze here-
I get the Bank of Japan is printing a lot of $$$.
I get that when a central bank buys a lot of bonds, it pushes up price, which pushes down interest rates, BUT if it is buying all the bonds that are being created to print money, wouldn't have a null effect on the price and yield of the bond?
the only answer I can see is, somehow, more bonds are being bought that were on the open market as well as newly issued bonds- but I don't see why a central bank would do that as it does it no good to do it unless it buys it from the government (as then it could give $$ in return)
-taking this further, if this were the case, governments could print infinite amount of $$$ without affecting bonds which I know is wrong
again just not understanding it
thanks for the help
having a bit of a brain freeze here-
I get the Bank of Japan is printing a lot of $$$.
I get that when a central bank buys a lot of bonds, it pushes up price, which pushes down interest rates, BUT if it is buying all the bonds that are being created to print money, wouldn't have a null effect on the price and yield of the bond?
the only answer I can see is, somehow, more bonds are being bought that were on the open market as well as newly issued bonds- but I don't see why a central bank would do that as it does it no good to do it unless it buys it from the government (as then it could give $$ in return)
-taking this further, if this were the case, governments could print infinite amount of $$$ without affecting bonds which I know is wrong
again just not understanding it
thanks for the help