The Bank of Japan may surprise the market again with a monetary policy tightening in January next year.Mr. Yensaid former finance minister Eisuke Sakakibara, who goes by the nickname
Sakakibara, now a professor at Aoyama Gakuin University, said in an interview with Bloomberg Television that the BOJ could raise the ceiling on 10-year government bond yields again at its next meeting. The yen is expected to rise to 120 yen to the dollar as the Bank of Japan’s ultra-easing policy rolls back.
Bank of Japan Governor Haruhiko Kuroda “could probably widen” YCC, Sakakibara said, adding that the governor “made policy normalization a little earlier” this week. .
The yen temporarily rose 4.8% on the 20th after the Bank of Japan raised its ceiling on 10-year bond yields to around 0.5% from around 0.25%. Swap rates for 10-year government bonds rose to 0.74%, signaling further dovish expectations.
Yen-denominated swaps suggest turbulent rise in yields and steeper interest rate trajectory
The exchange rate of the yen rose 0.5% to 131.78 yen against the dollar on the 22nd.
“Governor Kuroda likes to surprise,” Sakakibara said, adding that the BOJ could “significantly increase” the range of allowable fluctuations in yields. No specific numbers have been provided.
Original title:Mr. Yen says the BOJ could surprise again with a tightening in January(extract)
