Even with the yen depreciating and the dollar continuing to appreciate, there is no chance of the Yield Curve Control (YCC) program being revised during the tenure of Bank of Japan Governor Haruhiko Kuroda, which runs until April next year. economists said. wait.
But if traders believe the last major central bank holding back yield spikes is finally transitioning to political changes, even a small adjustment to the YCC, markets around the world will be hit hard.
It is undeniable that YCC has been under the most pressure this year since its introduction in 2016. If the Bank of Japan decides to surprise investors and ultimately toughen it up, it could wreak more havoc on global markets than the recently abandoned economic plans did. by the British government.
Jim O’Neill, a former economist at Goldman Sachs Group and now president of the Northern Gritstone investment firm, said of YCC: “For obvious reasons, such as the size and history of the program, the low yields of Japanese government bonds and the weak yen, “Sudden abandonment could wreak havoc, both domestically and globally,” he said, adding: “If handled poorly, it would likely have a greater global impact than the recent chaos that originated in the UK.”
news-rsf-original-reference paywall">Original title:Violent market swings await the day when the BOJ yield anchor lifts (1)(extract)
