Senior official from Bank of Japan doesn’t think yield cap ending will happen any time soon

According to information provided by the Nikkei daily, the Bank of Japan’s board member Hajime Takata thinks that the Japanese economy hasn’t yet reached a phase when it’s possible to end yield curve control (YCC).

The mentioned yield curve control involves setting a -0.1% target for short-term interest rates by the Bank of Japan, as well as capping the 10-year bond yield around 0%. These measures are aimed at sustainable reaching the inflation target level of 2%.

The markets are currently cluttered with rumors that the Bank of Japan will possibly remove the 10-year yield cap to compensate for growing costs of lengthy easing.

Takata’s words denying probable cancelling of yield curve control mirror Haruhiko Kuroda’s statements. Kuroda has repeatedly underlined the importance of keeping the monetary policy ultra-loose to support the country’s economy, which is in recovery after the coronavirus pandemic.