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BOJ Widens Band Around LongTerm Rate Target

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TOKYO, March 19 Reuters The Bank of Japan on Friday widened the band at which it allows longterm interest rates to move around its target, as part of a raft of measures to make its ultraeasy policy more sustainable amid a prolonged battle to fire up inflation.

As widely expected, the BOJ kept intact its target of 0.1 for shortterm rates and 0 for the 10year bond yield under its yield curve control policy.

COMMENTS

MASAAKI KANNO, CHIEF ECONOMIST, SONY FINANCIAL HOLDINGS, TOKYO

The widening of the range of the longterm interest rate is in line with expectations. On the ETF side, removing the 6 trillion yen target is not surprising as the BOJ has not bought ETFs as frequently as they used to do.

Its a very minor change. If the economy grows further and stock prices keep rising, then the BOJ is likely to allow the bond yield more flexibility to plusminus 0.3 or something like that. The bank is likely to continue to stick to its 10year JGB yield target of around 0 in that case.

Theres a long way to go before we even get close to 2 inflation. What we need to see is a very clear sign that Japans inflation rate accelerates further than zero.

MASAFUMI YAMAMOTO, CHIEF CURRENCY STRATEGIST, MIZUHO SECURITIES, TOKYO

Theres no reason for the dollaryen to react to the latest results of the BOJ assessment because its almost in line with what the media reported in advance.

Even if the productivity of the JGB yields increases, the change in the U.S. Treasury yields is much…

Wall St Ends Sharply Lower, Hit by Bond Yields

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