TOKYO : The Bank of Japan (BOJ) is under pressure to change its interest rate policy as soon as Wednesday, after the central bank's attempt to buy itself breathing room backfired, emboldening bond investors to test its resolve.Unlike other central banks that have been aggressively raising rates to battle
TOKYO : The Bank of Japan is under pressure to change its interest rate policy as soon as Wednesday, after the central bank's attempt to buy itself breathing room backfired, emboldening bond investors to test its resolve.
"If bond market function continues to deteriorate ahead of the BOJ's policy meeting, the risk of an early end to YCC could heighten," said veteran BOJ watcher Naomi Muguruma, chief bond strategist at Mitsubishi UFJ Morgan Stanley Securities. Instead, the BOJ's tweak opened a flood of expectations that a major change was imminent. Less than a month later, bond sellers broke the 0.5 per cent yield cap on Friday, forcing the BOJ into emergency bond-buying to bring the rate back down.
Investors are pricing in a change this week, with bets on the BOJ raising the top of the 10-year target band to 0.75 per cent, raising the centrepoint of the band from zero or ditching the target altogether. "If yield curve distortions aren't fixed, the BOJ must consider what more it can do," a second source said before Friday's market rout, a view echoed by another source.
Kuroda said in July the BOJ would not be in the RBA's position as the Japanese bank targets the 10-year yield, which is less affected by changes in market perceptions of future rate moves than three-year notes.
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Analysis:BOJ's yield curve control in danger as policy backfiresTOKYO : The Bank of Japan (BOJ) is under pressure to change its interest rate policy as soon as Wednesday, after the central bank's attempt to buy itself breathing room backfired, emboldening bond investors to test its resolve.Unlike other central banks that have been aggressively raising rates to battle
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Yen tests seven-month high ahead of BOJ policy decision; dollar wobblesSINGAPORE : The Japanese yen held near an over seven-month peak on Monday, as traders, in the lead up to the Bank of Japan's monetary policy decision this week, ramped up bets that the central bank could make further tweaks to its yield control policy.The yen was last 0.1 per cent lower at 128.01 per doll
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Asian shares cautious, BOJ faces crunch policy decisionSYDNEY : Asian shares started cautiously on Monday as investors waited nervously to see if the Bank of Japan (BOJ) will defend its super-sized stimulus policy at a pivotal meeting this week, while a holiday in U.S. markets made for thin trading.There were even rumours the BOJ might hold an emergency meeti
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Japan's sharp wholesale price rise heaps pressure on BOJ's ultra-easy policyTOKYO :Japan's annual wholesale prices rose at a faster-than-expected pace in December, data showed on Monday, adding to recent growing signs of inflationary pressure that could force the central bank to raise interest rates soon.The 10.2 per cent year-on-year rise in the corporate goods price index (CGPI), w
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Explainer-How does Japan's yield curve control work?TOKYO : The Bank of Japan's yield curve control (YCC) is under fierce market attack, as investors test the bank's commitment to capping bond yields with inflation above the BOJ's target.The BOJ's ultra-easy policy targets some short-term interest rates at -0.1 per cent and the 10-year government bond yiel
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Japan's sharp wholesale price rise points to growing inflationary pressureTOKYO : Japan's annual wholesale prices rose at a faster-than-expected pace in December, data showed on Monday, adding to recent growing signs of inflationary pressure that could keep the central bank under pressure to raise interest rates.The 10.2 per cent year-on-year rise in the corporate goods price i
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