BOJ sets long-term rate target in major policy overhaul

Japan's central bank kept rates steady at its meeting Wednesday but issued a plethora of fresh changes to its policy approach, indicating its comprehensive review of its negative interest rate policy and asset purchases was fruitful. 

 

Among the changes, the Bank of Japan (BOJ) said it would make yield curve control a centerpiece of its new policy framework, by a seven-to-two vote, said it would buy 10-year JGBs so that the yield would hover around zero percent. The BOJ eliminated the maturity range for its Japan government bond purchases and it abandoned its target to increase the monetary base by 80 trillion yen a year, although the central bank said it currently plans to keep buying bonds so that the balance of its holdings increase by that amount. It kept its deposit rate unchanged at negative 0.1 percent. The Nikkei was up 1.13 percent by 12:31 p.m. SIN/HK, compared with gains of around 0.3 percent just before the announcement, and trading slightly negative during the morning session. 

 

The dollar was fetching as much as 102.62 yen after the decision, compared with around 101.80 yen just before the announcement and as little as 101.09 yen earlier in the session. The 10-year Japan government bond yield surged into positive territory, trading at 0.003 percent at 12:33 p.m. SIN/HK, compared with levels as low as negative 0.062 percent before the announcement. 

 

Get live News Updates visit us at Ripples Advisory or One Missed Call on @98-27-80-80-90