BoJ Undertakes Bond Purchases To Safeguard Yields
20 Octubre 2022 - 4:02AM
RTTF2
The Bank of Japan conducted an unscheduled bond buying operation
on Thursday after the benchmark bond yields exceeded the
ceiling.
The BoJ targets 10-year Japanese government bond yield of zero
percent, with a cap of 0.25 percent. The central bank held bond
buying operations as the yield rose to 0.255 percent on
Thursday.
The ultra-loose monetary policy, aimed at boosting economic
growth, has pushed the Japanese yen to a 32-year low against the US
dollar. The yen weakened to around 149.3 against the dollar on
Wednesday, much closer to the psychological barrier of 150.
The wide interest rate differentials between the Japan and the
US, and the hawkish comments from the Federal Reserve officials
drove the yen further down.
The weaker yen pushes up import prices of energy and food amid
subdued wage growth, which ultimately dampen Japanese household
spending and economic growth.
Early on Thursday, Finance Minister Shunichi Suzuki said
excessive forex moves are absolutely intolerable and reiterated
that appropriate measures will be taken in order to address the
volatility, Kyodo News reported. The minister said the one-side
moves in the currency market are undesirable.
The BoJ had intervened in the currency market on September 22,
when the yen slid to 145.9 to the dollar. This was the first such
action in 24 years. However, the impact of the latest intervention
was short-lived.
Earlier this week, BoJ Governor Haruhiko Kuroda rejected the
opposition's demand for his resignation over the failure to curb
the fall in currency. His term is set to end in April 2023.
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