Ueda says versatile yield curve management doesn’t change Financial institution of Japan’s simple stance
Financial institution of Japan Gov. Kazuo Ueda mentioned Friday that the financial institution’s choice to make its yield curve management extra versatile doesn’t imply a shift of its simple financial coverage stance.
“It was geared toward rising the chance of attaining the [2% inflation] goal by making the yield curve management coverage extra versatile and enhancing the sustainability of the framework,” Ueda mentioned.
The BOJ mentioned Friday that it’s going to think about its 0.5% cap on the 10-year Japanese authorities bond yield
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as a suggestion, not a inflexible restrict. It additionally mentioned it will buy JGBs at a 1% yield each enterprise day, which successfully units a brand new laborious cap for the 10-year yield at 1%.
Friday’s choice would give the JGB market extra freedom to find out the 10-year yield by itself, Ueda mentioned. He added, nonetheless, the financial institution would preserve cont rol out there so speculative promoting of JGBs doesn’t develop into too dominant.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com