Speculation Lingers about Further Policy Tweak by BOJ

Economy

Tokyo, Dec. 29 (Jiji Press)--The Bank of Japan has been unable to stamp out market rumors that the central bank will take further steps to tweak its massive monetary easing program over a week after it made a surprise decision to modify its yield curve control policy.

BOJ Governor Haruhiko Kuroda has been reiterating that the BOJ's decision to allow the benchmark 10-year Japanese government bond yield to move between plus and minus 0.5 pct, compared with the previous tolerable range of plus and minus 0.25 pct, was not the first step in the central bank's exit from its monetary easing policy.

Meanwhile, upward pressure on JGB yields remains strong, with investors continuing to sell JGBs in anticipation of further policy modifications by the BOJ.

The central bank has been trying hard to curb yield rises, for instance, through JGB purchases.

Government security yields normally stand higher for those with longer maturities. But the 10-year JGB yield stayed at low levels at a time when yields were broadly on the rise, due to active purchases by the BOJ, creating what can be called a distortion.

[Copyright The Jiji Press, Ltd.]

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