Bank Of Japan Widens 10-Year JGB Yield Target Band

RTTNews | 835 days ago
Bank Of Japan Widens 10-Year JGB Yield Target Band

(RTTNews) - The Bank of Japan expanded its 10-year Japanese government bond yield target band on Tuesday, surprising market participants, pushing the yen sharply higher, and led to a fall in government bonds.

At the policy meeting of the BoJ, board members unanimously decided to maintain a negative interest rate of -0.1 percent on current accounts that financial institutions maintain at the central bank.

The bank will also continue to purchase a necessary amount of JGBs without setting an upper limit so that 10-year JGB yields will remain at around zero percent.

However, they decided to expand the range of 10-year JGB yield fluctuations to around plus and minus 0.5 percentage points from around plus and minus 0.25 percentage points.

The BoJ has been buying sizeable amount of bonds this year to defend its yield cap. As a result, bond holdings of the BoJ have hit a new record recently.

The Japanese central bank said it is willing to take additional easing measures, if needed. The bank also expects short and long-term policy interest rates to remain at their current or lower levels. The latest move is likely to pave the way for fine-tuning the current ultra loose monetary policy under the leadership of new governor after the incumbent Haruhiko Kuroda's term ends next April.

There was nothing in the policy statement that would suggest that the decision heralds a wholesale tightening of monetary policy, Marcel Thieliant at Capital Economics said. The economist expects the short-term policy rate to remain at -0.1 percent for the foreseeable future.

The BoJ said the decision to modify the conduct of yield curve control will help to improve market functioning and encourage a smoother formation of the entire yield curve, while maintaining accommodative financial conditions.

Japan's economy is expected to recover, with the impact of the pandemic and supply-side constraints waning. However, the BoJ cautioned that there remain extremely high uncertainties.

read more
Japan Manufacturing Sector Continues To Stagnate

Japan Manufacturing Sector Continues To Stagnate

The manufacturing sector in Japan continued to contract in March, and at a faster pace, the latest survey from Jibun Bank revealed on Tuesday with a manufacturing PMI score of 48.4.
RTTNews | 2 days ago
Japan Retail Sales Rise 0.5% In February

Japan Retail Sales Rise 0.5% In February

The value of retail sales in Japan was up a seasonally adjusted 0.5 percent on month in February, the Ministry of Economy, Trade and Industry said on Monday - coming in at 12.193 trillion yen.
RTTNews | 3 days ago
BoJ Minutes: Japan Economic Activity Developing As Expected

BoJ Minutes: Japan Economic Activity Developing As Expected

Members of the Bank of Japan's Monetary Policy Committee believe that the country's prices and economic activity are in line with expectations, minutes from the central bank's January 23-24 meeting revealed on Tuesday.
RTTNews | 9 days ago
Japan Inflation Data Strengthens Call For Rate Hike

Japan Inflation Data Strengthens Call For Rate Hike

Japan overall consumer price inflation softened in February largely due to government subsidies for energy but the increase in core inflation together with higher wage growth and services inflation put pressure on the Bank of Japan to lift key interest rates. Excluding fresh food and energy, inflation rose to 2.6 percent from 2.5 percent in the previous month, the Ministry of Internal Affairs and
RTTNews | 13 days ago