The Bank of Japan (BoJ) maintained its yield curve control policy with the short-term and 10y JGB targets of -0.1% and 0%.
The policy review basically brings three new decisions:
The BoJ will introduce an “Interest Scheme to Promote Lending” which enables the bank to cut interest rates while mitigating its negative side effects.
It widens the band in which 10y-JGB yields can fluctuate from 20 bps to 25 bps.
The bank will purchase ETFs and J-REITs only when necessary with an upper annual limit of JPY 12 tr resp. JPY 180 bn.
The new measures look to add more flexibility to the BoJ policy options but we consider the hurdles for a fundamental change in interest rate policy still as substantial..
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BoJ policy review introduces additional interest rate flexibility
19. März 2021
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BoJ policy review introduces additional interest rate flexibility
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