Bank of Japan Gov. Kazuo Ueda said Friday that the bank’s decision to make its yield curve control more flexible doesn’t mean a shift of its easy monetary policy stance.
“It was aimed at increasing the probability of achieving the [2% inflation] target by making the yield curve control policy more flexible and improving the sustainability of the framework,” Ueda said.
The BOJ said Friday that it will consider its 0.5% cap on the 10-year Japanese government bond yield
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as a suggestion, not a rigid limit. It also said it would purchase JGBs at a 1% yield every business day, which effectively sets a new hard cap for the 10-year yield at 1%.
Friday’s decision would give the JGB market more freedom to determine the 10-year yield on its own, Ueda said. He added, however, the bank would keep cont rol in the market so speculative selling of JGBs doesn’t become too dominant.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com
This post was originally published on Market Watch
