TOKYO, Dec 20 (Reuters) – The Bank of Japan shocked markets on Tuesday with a surprise tweak to its bond yield controls that allows long-term interest rates to rise more, a move aimed at easing some of the costs of prolonged monetary stimulus.
Shares tanked, while the yen and bond yields spiked following the decision, which caught off-guard investors who had expected the BOJ to make no changes to its yield curve control (YCC) until Governor Haruhiko Kuroda steps down in April.
Full coverage: REUTERS
Bank Of Japan Makes Surprise Policy Tweak
Dec 20 (Reuters) – The Bank of Japan has slightly loosened the shackles on its 10-year yield target and said it will review the operation of its yield-curve control policy, surprising financial markets and sending the yen sharply higher.
Here are some comments from experts:
TAKESHI MINAMI, CHIEF ECONOMIST AT NORINCHUKIN RESEARCH INSTITUTE, TOKYO:
“It came as a surprise, but if the decision was delayed into next year, (the BOJ) might not be able to make such a move as the economy is set to worsen.
Full coverage: REUTERS
Yen Soars To 4-Month Peak After Surprise BOJ Policy Tweak
TOKYO, Dec 20 (Reuters) – The yen surged to a four-month peak against the dollar on Tuesday after the Bank of Japan said it would review its yield curve control policy and widened the trading band for the 10-year government bond yield in an unexpected tweak.
While it kept broad policy settings unchanged – pinning short-term JGB yields at -0.1% and the 10-year yield around zero – it widened the allowable band for long-term yields to 50 basis points either side of that, from 25 basis points previously.
Full coverage: REUTERS
Asian Shares Slide As Yen Spikes Higher On BOJ Surprise Policy Shift
SYDNEY, Dec 20 (Reuters) – The yen surged and Asian shares fell sharply on Tuesday after Japan’s central bank unexpectedly tweaked its bond yield controls – a move that will allow long-term interest rates to rise more.
While the Bank of Japan kept broad policy settings unchanged it widened the allowable band for long-term yields to 50 basis points either side of that, from 25 basis points previously.
That triggered an immediate spike in the yen with the greenback dropping 2.71% after the decision to 133.16 , a four-month low.
Full coverage: REUTERS
Morning Bid: Sayonara, Cheap Money
A look at the day ahead in European and global markets from Ankur Banerjee.
And so the last dove prepares to fly the coop, and the end of an era of super-cheap liquidity comes into view.
The Bank of Japan has loosened its yield-curve control, the 10-year yield has surged toward its new ceiling and pulled the yen with it. Japanese government bond futures fell fast enough to trip a circuit breaker in Tokyo and the Nikkei lost 2.8%.
Full coverage: REUTERS
