2023-07-18 23:33:23
Bank of Japan (BOJ, BOJ) Governor Kazuo Ueda said on Tuesday (18th) that he will continue to patiently implement the ultra-loose monetary policy under yield curve control (YCC), in view of achieving the central bank’s 2% inflation target There is still a distance.
Whether the Bank of Japan will adjust the YCC in this month’s interest rate review has been a hotly discussed issue in the market. Kazuo Ueda revealed following attending the G20 Finance Ministers and Central Bank Governors’ meeting on Tuesday: Given that inflation targets are still some distance away, we have continued to patiently implement ultra-loose monetary policy under the YCC.”
Kazuo Ueda said continued patient implementation of the ultra-loose monetary policy under the YCC, given that the central bank’s 2% inflation target is still some distance away (Photo: REUTERS/TPG)
Kazuo Ueda said that the Bank of Japan will carefully review the pace of progress Japan has made in sustainably achieving the 2% target at each policy meeting, and if there is still a distance from the target, the overall language of monetary policy will remain unchanged.
The YCC mainly controls the long-term and short-term interest rate spreads in the bond market to influence economic activity and expectations.The Bank of Japan kept its short-term interest rate, known as the overnight call rate, at minus 0.1%, while keeping the 10-Year Treasury Bond YieldMaintained at a level close to 0%, committed to raising the inflation rate to the 2% target.
With inflation overshooting its 2% target for more than a year, speculation is rife that the BOJ might adjust the YCC as early as this month to address rising costs, such as market tensions caused by massive bond purchases to defend yield caps. distortion.
Sources told Archyde.com the idea of adjusting the YCC as early as this month has been discussed internally at the BOJ, but the discussions are preliminary and no final decision has been made.
Former Bank of Japan governor Hideo Hayakawa said recently that the central bank may adjust the YCC at this month’s policy meeting, given that inflation is stronger than expected.
Analyst: Any correction in YCC would send USD/JPY sharply lower (Image: shutterstock)
Sean Callow, senior currency strategist at Westpac Bank, analyzed that as the Bank of Japan meeting on July 28 approaches, people are feeling a certain degree of unease, and any adjustment in YCC will promote the dollar once morest the dollar.JPYA sharp drop and recent price action suggests there is a lot of fear.
This year’s ups and downsJPY, When can investors still pick up the bargain? Three-quarters of economists polled by Archyde.com believe the BOJ is likely to maintain the YCC policy until at least next year, mainly due to lower expectations for a near-term policy change by Kazuo Ueda, according to a previous Archyde.com poll.
As of press time, USD/USDJPYInched up 0.11% to 138.97 JPY。
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