The Bank of Japan gave no ground at all to bond traders today as it left all its major policy settings unchanged. Governor Kuroda was resolute in claiming that Yield Curve Control has no limits in his press conference. But the likelihood is that defending the current ceiling on 10-year yields will require bursts of heavy JGB purchases. To prevent its bond holdings swelling to unsustainable levels, we think that the BoJ will choose to widen the tolerance band from ±0.25% to ±50% before long.
Markets Drop-In (22nd June, 10:00 ET/15:00 BST): Join our Markets team for this special briefing on the outlook for equities, bonds and FX and a discussion about revisions to our forecasts. Register now
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.