Treasuries rally after BOJ says U.S. ‘uncertainty’ growing

Treasuries rose, erasing their losses from last week, after the Bank of Japan said “uncertainty” regarding the American economy is growing, reviving demand for safety. U.S. government notes headed for a fifth monthly gain as the BOJ’s expansion of a bank-loan program fell short of traders’ expectations. The Federal Reserve bought $360 million of Treasury Inflation Protected Securities, the least amount since it resumed buying government debt this month. “The market was looking for a broader expansion of the package from the Bank of Japan and stronger steps to shore up their market,” said Christian Cooper, senior rates trader in New York at Jefferies Group Inc., one of the 18 primary dealers that trade directly with the Fed. “The increasing uncertainty that was mentioned also set the tone for the bid this morning. It’s positive for fixed income.”

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