BOJ: Higher long -term rates reflect market opinions on the economy – Kazuo Ueda

The governor of the Bank of Japan, Kazuo Ueda, said early Wednesday that it is natural that long -term rates change in line with the market perspective on short -term policy rates.

Key quotes

The market determines long -term rates.

There is no big difference between our opinion and that of the markets when asked about the recent increases in long -term rates.

Changes in long -term rates reflect market opinions on economic, price trends and global fees adjustments.

It is true that long -term rates have been increasing as a trend since last year.

Long -term rates have been increasing as a trend since last year.

The increase in extended rates will probably raise financing costs for government finances.

Market reaction

At the time of publication, the USD/JPY torque rises 0.20% in the day to quote at 148.09.

Japan Faqs Bank


The Bank of Japan (BOJ) is the Japanese Central Bank, which sets the country’s monetary policy. Its mandate is to issue tickets and carry out monetary and foreign exchange control to guarantee the stability of prices, which means an inflation objective around 2%.


The Bank of Japan has embarked on an ultralaxa monetary policy since 2013 in order to stimulate the economy and feed inflation in the middle of a low inflation environment. The bank’s policy is based on the Quantitative and Qualitative Easing (QQE), or ticket printing to buy assets such as state or business bonds to provide liquidity. In 2016, the Bank redoubled its strategy and relaxed even more policy by introducing negative interest rates and then directly controlling the performance of its state bonds to 10 years.


The massive stimulus of the Bank of Japan has caused the depreciation of the Yen in front of its main monetary peers. This process has been more recently exacerbated due to a growing divergence of policies between the Bank of Japan and other main central banks, which have chosen to abruptly increase interest rates to combat inflation levels that have been in historical maximums. Japan Bank’s policy to maintain low types has caused an increase in differential with other currencies, dragging the value of YEN.


The weakness of the YEN and the rebound in world energy prices have caused an increase in Japanese inflation, which has exceeded the 2% objective set by the Bank of Japan. Even so, the Bank of Japan judges that the sustainable and stable achievement of the 2%objective is not yet glimpsed, so an abrupt change of current monetary policy seems unlikely.

Source: Fx Street

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