The officials of the Bank of Japan (BoJ) are ready to defend the risk of Japan’s benchmark bond yield rising too high ahead of a policy review later this month, although yields have not reached the 0.2% level, Bloomberg reports, citing people familiar with the matter.
The BoJ has a flexible range of motion of around 0.2 percentage points on either side of its zero targets for performance. While the current ceiling is intentionally vague, the bank would not allow the yield to reach 0.3% before its policy review, as that would raise doubts about the credibility of the yield curve control, the financial news agency added. .
The article adds that while some bond fluctuations, reflecting the recent global market shift in economic outlook, are acceptable, the bank must keep the entire yield curve low and stable amid the pandemic.
These comments occur after the benchmark Japanese government bond (JGB) yield will hit a five-year high on Friday at 0.175% on Friday.
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