Former BoJ official: BoJ will likely discuss whether to tweak fwd guidance, YCC at meeting

<p>Kazuo Momma is a recent ex-Bank of Japan official, was the executive director in charge of monetary policy, and is now a senior economist at Mizuho Research &amp; Technologies.</p><p>He says Bank of Japan board members will likely discuss whether to tweak forward guidance along with the yield curve control mechanism when they meet next, October 30 and 31. </p><ul><li>“Japan’s long-term yields have already risen to 0.8%,” </li><li>“Even if it’s not stuck at the ceiling of 1%, it will be a topic of discussion whether the current ceiling would be reasonable if there’s more upward pressure going forward.”
</li></ul><p>Momma outlined options the bank is likely to discuss:</p><ul><li>could raise the rate for its daily fixed rate operation from 1% </li><li>or lift its target rate for 10-year bond yields to 0.25%</li><li>could push the upper limit higher</li></ul><p>“There won’t be an end to the negative rate and YCC in October, as they are linked to the 2% inflation target that hasn’t been achieved”</p>

This article was written by Eamonn Sheridan at www.forexlive.com.