58558
BoJ to Keep Policy Steady
World Economy

BoJ to Keep Policy Steady

The Bank of Japan is set to keep monetary policy steady on Tuesday and seek to allay speculation of an early tapering of its massive stimulus, as recent bond market turbulence puts to the test its revamped policy framework that aims to control the yield curve.
Japanese government bond yields spiked last week after the BoJ skipped a much-anticipated auction to buy short-term debt on Wednesday, leaving investors wondering about its intentions and casting doubt on its resolve to cap bond yields. Two days later, it surprised markets again by increasing bond purchases, Reuters reported.
The BoJ says such adjustments to its market operations are aimed at getting markets accustomed to a decision it made last September, which was to shift its policy focus to interest rates from the pace of bond buying, sources say.
The central bank was forced into making the policy revamp after more than three years of aggressive bond buying failed to accelerate inflation to its 2% target.
But the new framework, dubbed “yield curve control”, has brought in new challenges. With markets accustomed to huge bond buying by the BoJ, any sign of slowdown in its purchases has heightened market volatility and prompted market speculation it could withdraw stimulus earlier than expected.
At a post-meeting news conference, BoJ Governor Haruhiko Kuroda is likely to stress that any tapering of the bank’s huge asset-buying program would be some time off as inflation remains distant from its 2% target.
“Kuroda probably does not want to give markets the impression the BoJ is eyeing an early exit from its ultra-loose policy as that could turn around the current favorable weak-yen trend,” said Izuru Kato, chief economist at Totan Research.
“The BOJ may consider raising its yield targets later this year, but only if yen declines become excessive and hurt households by pushing up grocery costs.”

Short URL : https://goo.gl/3i8o6A
  1. https://goo.gl/lsbEpu
  • https://goo.gl/mh159W
  • https://goo.gl/hcMFYm
  • https://goo.gl/C8OAaZ
  • https://goo.gl/cKScSK

You can also read ...

More and more people in Europe are now able to find a job.
The European Commission published its yearly report on Labor...
European Equities Hit Pause Button
Europe’s major stock markets paused on Tuesday as investors...
Goldman Offers Buyback, Dividend Details
Goldman Sachs Group Inc offered investors a window into its...
Kenya’s debt is currently at $38.7b.
Kenya’s rising debt is set to hit 60% of gross domestic...
US Industrial Output Picks Up
US industrial output rose in September as the effects of...
Economic recovery will be key to bringing down the jobless rate of 21%.
Greece’s economy fell into recession again last year,...
Algeria Worst Country in Economic Freedom
Algeria is one of the worst countries in the world for...
In Southeast Asia, the Philippines is seen leading with GDP growth at 6.6% this year and 6.7% in 2018.
The IMF’s latest “Regional Economic Outlook” report paints a...

Add new comment

Read our comment policy before posting your viewpoints

Image CAPTCHA
Enter the characters shown in the image.

Trending

Googleplus