After stating that the recent and rapid weakening of the yen is negative for the economythe governor of the Bank of Japan (BOJ), Haruhiko Kuroda, has added that they are not targeting a specific level of the currency.
Additional comments
I see no limit in controlling the yield curve.
We do not change the idea that the control of the yield curve strongly supports the economic recovery.
The rapid rise in long-term yields in the US and Europe has had a substantial impact on yields in Japan, making the YCC necessary.
Currency fluctuations may not have an immediate impact on investments.
Currency fluctuations may not have a big impact on business confidence, as Japan’s capex remains strong.
I don’t see the need for further monetary easing now.
Raising the implicit cap on the 10-year bond yield target would weaken the economy.
I don’t think raising the Bank of Japan’s long-term yield target cap above the current 0.25% as it could lead to higher yields and weaken the effect of monetary easing.
We keep a close eye on the US economy and prices.
No country runs a currency-oriented monetary policy.
Recent currency and interest rate movements have had a substantial impact on the economy and pricesso you have to pay close attention to them.
The Bank of Japan has been and will be able to create an appropriate yield curve under the YCC, using tools such as the fixed rate bond purchase operation.
The 2% inflation target must be achieved by supporting Japan’s economic recovery.
The market is currently focused on interest rate spreads as a factor behind currency movements, but the factor may vary based on economic and financial trends.
We believe that we can create a proper yield curve by taking various trades despite speculation.
In theory, the YCC can be sustained even with rising foreign yields through increased bond buying and fixed rate trading.
Source: Fx Street
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