BOJ Sets 10 Year Bond Target

The Bank of Japan embarked on a new policy phase Wednesday, adopting the country’s 10-year interest rate as a new target instead of boosting its already massive asset purchases, in an attempt to achieve its 2 percent inflation goal as soon as possible.

After its two-day Policy Board meeting, the central bank said it had decided by a 7-2 majority vote to modify the framework of its bond-buying program to keep the yield of the bellwether 10-year Japanese government debt around zero percent.

To push down shorter-term interest rates, the BOJ left its negative policy rate unchanged at minus 0.1 percent, while promising to continue expanding the monetary base until consumer prices exceed 2 percent in a stable manner.

“The BOJ will take additional easing measures without hesitation if necessary,” Governor Haruhiko Kuroda said at a press conference after the meeting, adding the bank may extend its negative interest rate and cut the target level of a long-term interest rate to make financial conditions more accommodative.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza