In a recent move, Kazuo Ueda, the governor of the Bank of Japan, has reiterated the continuation of their yield-curve-control policy. This policy, implemented in 2016, is specifically designed to manage long-term interest rates. Today, Ueda declared a “reference point” of a maximum of 1% on the yield for 10-year Japanese Government Bonds (JGBs). This contrasts with the previous official target of zero percent.
This policy adjustment aligns with Ueda’s statement from earlier this year in July, where he set a cap at 1%. This cap indicated a substantial increase from the preceding caps, which were progressively set at 0.5%, 0.25%, and 0.1%. The consistent implementation of the yield-curve-control policy and the recent setting of the reference point underlines the Bank of Japan’s commitment to controlling long-term interest rates and managing economic stability.
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