Question about bond yields and prices - (ESP in Japan)

Discussion in 'Economics' started by Newmoney24, Apr 8, 2013.

  1. 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