Source: Reuters
Author: Leika Kihara
Article: Original article
Publication date: Saturday, December 10, 2022
Nikkei daily stated that Japan's economy isn’t yet at the phase where the central bank can relinquish control of the yield curve (YCC), said its board member Hajime Takata.
Under YCC, the Bank of Japan (BOJ) sets a short-term interest rate target at –0.1% and caps the 10-year bond yield at about 0% in order to sustainably meet its inflation target of 2%.
Markets are beginning to lay into the USD/JPY currency pair the scenario that the Bank of Japan may remove the 10-year bond yield ceiling to offset the rising cost of long-term easing.
In his interview to Nikkei about whether the central bank might abandon the YCC, which was published on Saturday, Takata said that Japan hadn’t yet reached that phase.
This comment echoes BOJ Governor Haruhiko Kuroda's statements, who has repeatedly stressed the need of maintaining ultra-soft monetary policy to support an economy that is still recovering from the effects of the COVID-19 pandemic.
Forecast: the growth of USD/JPY
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