While deciding to keep the BOJ’s benchmark interest rate at minus 0.10 percent, made an unexpected move in yield control.
Although the Bank of Japan (BOJ) kept the policy rate at minus 0.1 percent, the new president Kazuo Ueda made the first surprise of his term by being flexible in yield curve control.
The bank changed the yield curve control to allow the 10-year yield to fluctuate around 0.5 percent. This level, which was previously seen as a strict limit by the bank, has now been called the “reference point”.
The BOJ will also buy 10-year government bonds every business day with a yield of 1 percent. After the decision, which was not seen as hawkish enough in the first place, the yen fell by 1 percent against the dollar for a while, but deleted its losses and went up 1 percent.