Japan Benchmark Long-Term Rate Hits 0.545 Pct


Tokyo, Jan. 13 (Jiji Press)--Japan's benchmark long-term interest rate reached 0.545 pct in Tokyo interdealer trading Friday, exceeding the Bank of Japan's new cap on the rate and hitting the highest level since June 2015.

The yield on the newest 369th 10-year Japanese government bond issue, which became the benchmark long-term rate after last week's issuance, topped the new upper limit of 0.5 pct set by the BOJ on 10-year JGB yields for the first time since the central bank expanded the tolerable range for the yields last month.

At a two-day meeting of its Policy Board through Dec. 20, the BOJ decided to tweak its yield curve control policy, allowing 10-year JGB yields to move between plus and minus 0.5 pct, against the previous range of plus and minus 0.25 pct.

Ahead of the BOJ's next policy-setting meeting scheduled for Tuesday and Wednesday, speculation persists in the market that the central bank may decide on another policy tweak, putting upward pressure on JGB yields, market sources said.

On Friday, the BOJ offered to buy an unlimited amount of 10-year JGBs at the yield of 0.5 pct and made extraordinary JGB purchases, clarifying its stance to keep in check excessive rises in interest rates.

[Copyright The Jiji Press, Ltd.]

Jiji Press