Citing Takeo Hoshi, an academic closely linked to central bank policymakers, Reuters reported on Tuesday that the Bank of Japan (BoJ) may drop cap on 10-year Japanese government bond yields by 2023 due to the increasing chances that inflation and wages will exceed expectations.
Key comments
“The BoJ must maintain ultra-loose policy for the time being to convince the public that it is serious about reviving the economy long enough to generate sustained inflation.”
“With inflation expectations already “sufficiently” high, core consumer inflation could exceed the BoJ’s 2% target next fiscal year, opening room for the central bank to abandon its 0% target for 10-year bond yields.”
“Prices have not gone up much in Japan in the past, but that is changing. Japan could enter an era of high inflation. The BoJ should start to worry about the possibility of inflation accelerating more than expected.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
