Market Puzzled by BOJ Execs’ Conflicting Views on Rate Swings

Politics

Tokyo, March 10 (Jiji Press)--Japan’s financial markets are in a state of confusion after Bank of Japan Governor Haruhiko Kuroda and Deputy Governor Masayoshi Amamiya expressed diverging views on the central bank’s current monetary policy.

The two differed in their opinions on expanding the range of 10-year Japanese government bond yields’ fluctuations that the BOJ will tolerate, leading the key JGB yield to fluctuate violently and causing headaches for the bond market.

The BOJ is set to examine its current monetary policy at its Policy Board meeting March 18-19.

Currently, the BOJ has a policy of guiding 10-year JGB yields to around zero, while tolerating fluctuations to around plus and minus 0.2 pct. The prolonged effort to keep interest rates low, however, has caused side effects such as worsening earnings among financial institutions, leading to speculation that the range will be widened.

But Kuroda told the House of Representatives Financial Affairs Committee on Friday that he does not believe such an expansion is necessary.

[Copyright The Jiji Press, Ltd.]

Jiji Press