Yen apparently suffers another round of selling after BoJ Governor Haruhiko Kuroda’s post meeting press conference. A key to note is that under the strengthened framework, BoJ will now allow yields to move between -0.1% and +0.1%. And Kuroda emphasized that “we do not intend this change to lead to a rise in interest rate levels.” He added that the 0.2% range will “improve functions in the government bond market, which had been deteriorating” and “help make our easy-policy more sustainable”.
“On forward guidance, Kuroda said it’s for strengthening the “commitment to achieve our 2 percent inflation target”. And, “we’ve adopted this to ensure market trust in our policy as we will be maintaining our massive stimulus longer than initially expected.” Kuroda pointed to “some speculation” that BoJ will seek an “early exit”. And he hoped this can “dispel such speculation”.
He also admitted that it takes “longer than expected” for inflation to pick up. Hence, “achievement of our target will be beyond our (three-year) forecast timeframe”. And he also emphasized that “Under our yield curve control (YCC), real interest rates will fall even if nominal rates are steady as long as inflation expectations heighten.” But there is no need for additional easing for now.
10 year JGB yield drops to as low as 0.054, after hitting 0.115 earlier today.