Yen and bond yields rise after BOJ pledges more flexibility to yield curve control

Original Article:

Source: Link

The Japanese yen strengthened and 10-year JGB yield rose after the Bank of Japan said it would allow "greater flexibility" in its target range for 10-year Japanese government bond yields. Yields for 10-year Japanese government bonds rose to 0.575% for the first time since September 2014, before easing slightly to 0.55%. The yen was trading at 138.64 against the dollar at 12:35p.m. Hong Kong and Singapore time. After a two-day policy meeting, the BOJ adjusted its stance on its yield curve control policy, saying it will continue to allow 10-year government bond yields to fluctuate in the range of around plus and minus 0.5%. The central bank also offered to buy 10-year JGBs at 1% every business day through fixed-rate operations, unless no bids are submitted. The move effectively expands its tolerance by another 50 basis points. A Nikkei report earlier said the BOJ will let long-term interest rates rise beyond its cap of 0.5% "by a certain degree" at its monetary policy meeting today.