The Reserve Bank of Australia (RBA) resumed buying 3-year government bonds for the second time this week to continue to maintain its government bond yield target from rising above 0.10% due to recent commodity prices and global inflation.
Despite the latest announcement by the central bank, Australia's 3-year bond yields continued to show an increase of around 0.14%. Meanwhile, 10-year bond yields also jumped to 1.737%, the highest in 21 months.
The RBA today bought A $ 5 billion in bonds, the second purchase made this week after A $ 1 billion on Monday did not have much of an impact amid rising trade reflections.
The central bank also announced that it will buy A $ 3 billion in securities mature in April 2023 and 2024, as well as A $ 2 billion from November 2028 to 2031 under its quantitative easing program.
The rise in Australian bond yields has prompted Aussie dollar trading to soar to its latest 3-year high in the Asian session, approaching the 0.8000 price level against the USD.
Meanwhile, New Zealand's 10-year bond yield also rose to 1.875%. The kiwi dollar remained strong after recording its latest high of 3 years in the previous session, supported by the decision of the Reserve Bank of New Zealand (RBNZ) policy meeting.
