{"id":108937,"date":"2021-03-08T11:24:37","date_gmt":"2021-03-08T11:24:37","guid":{"rendered":"https:\/\/fin2me.com\/?p=108937"},"modified":"2021-03-08T11:24:37","modified_gmt":"2021-03-08T11:24:37","slug":"boj-deputy-governor-amamiya-says-yields-can-move-more-but-not-too-much","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/boj-deputy-governor-amamiya-says-yields-can-move-more-but-not-too-much\/","title":{"rendered":"BOJ deputy governor Amamiya says yields can move more – but not too much"},"content":{"rendered":"

TOKYO (Reuters) – Bank of Japan Deputy Governor Masayoshi Amamiya said bond yields should be allowed to move more \u201cas long as it does not diminish the effect of monetary easing\u201d, suggesting that steps to revive a nascent market will be discussed at next week\u2019s policy review.<\/p>

FILE PHOTO: Bank of Japan Deputy Governor Masayoshi Amamiya speaks during a Reuters Newsmaker event in Tokyo, Japan July 5, 2019. REUTERS\/Issei Kato<\/figcaption>

Amamiya said the BOJ must focus on keeping borrowing costs \u201cstably low\u201d for the time being as the economy suffers from the coronavirus pandemic, echoing comments made by Governor Haruhiko Kuroda on Friday.<\/p>\n

But he added that fluctuations in yields could help breathe life back into a dormant market, as long as the moves were kept at a range that did not cripple Japan\u2019s economy.<\/p>\n

\u201cA big fluctuation in interest rates could have undesirable consequences. But when it\u2019s limited to a certain range, it\u2019s possible to enhance bond market functions, without diminishing the monetary easing effect of our policy,\u201d he said in a speech.<\/p>\n

\u201cPersonally, I feel yields should be allowed to move more, as long as it does not diminish the effect of monetary easing,\u201d Amamiya said in a question-and-answer session after the speech on Monday.<\/p>\n

Benchmark 10-year Japanese government bond (JGB) futures dipped about 0.1 point after Amamiya\u2019s comments.<\/p>\n

Amamiya\u2019s remarks underscore the communication challenge the BOJ faces as it seeks to meet two conflicting goals – to allow market forces drive yields more while avoiding a spike in borrowing costs that damages Japan\u2019s recovery.<\/p>\n

The BOJ caps the 10-year bond yield around zero under a policy dubbed yield curve control (YCC), and currently allows the benchmark yield to move 40 basis points around the target.<\/p>\n

Allowing yields to fluctuate more around the target is seen as among key purposes of next week\u2019s review, which aims to make the BOJ\u2019s policy framework \u201cmore effective and sustainable\u201d.<\/p>\n

\u201cThe BOJ probably wants yields to fluctuate a bit more. But it also wants to set a speed limit on how rapidly yields could move,\u201d said Mari Iwashita, chief market economist at Daiwa Securities. \u201cThe message from the review could be pretty fuzzy.\u201d<\/p>\n

RATE CUT A KEY TOOL<\/h2>\n

Japan\u2019s 10-year yield fell to a three-week low on Friday after Kuroda said he saw no need to widen the implicit band set around the BOJ\u2019s 0% target, stunning investors who had expected such a move to be announced at the policy review.<\/p>\n

Amamiya said the governor likely expressed his personal opinion, adding the idea would be discussed at the review by the nine board members who had \u201cvarious views\u201d on the subject.<\/p>\n

The review would also seek to dispel a dominant market view the BOJ has run out of ammunition to ease more, Amamiya said.<\/p>\n

Interest rate cuts were among \u201cimportant options\u201d if the BOJ were to ease further, he said, stressing that it would take steps to mitigate the side-effects of such moves at the March review.<\/p>\n

\u201cSome market players think the BOJ can\u2019t and won\u2019t ease policy further due to the side-effects of its policy. We must dispel such views,\u201d he said.<\/p>\n

As for the BOJ\u2019s risky asset buying, the BOJ would consider how to maximise the positive impact of such steps by pledging to buy exchange-traded funds (ETFs) and real-estate trust funds (REITs) aggressively in times of market shock, Amamiya said.<\/p>\n

The BOJ will conduct a review of its policy tools at its rate-setting meeting on March 18-19.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

TOKYO (Reuters) – Bank of Japan Deputy Governor Masayoshi Amamiya said bond yields should be allowed to move more \u201cas long as it does not […]<\/p>\n","protected":false},"author":3,"featured_media":108936,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\nBOJ deputy governor Amamiya says yields can move more - but not too much - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/markets\/boj-deputy-governor-amamiya-says-yields-can-move-more-but-not-too-much\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BOJ deputy governor Amamiya says yields can move more - but not too much - Fin2me\" \/>\n<meta property=\"og:description\" content=\"TOKYO (Reuters) – Bank of Japan Deputy Governor Masayoshi Amamiya said bond yields should be allowed to move more \u201cas long as it does not [...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fin2me.com\/markets\/boj-deputy-governor-amamiya-says-yields-can-move-more-but-not-too-much\/\" \/>\n<meta property=\"og:site_name\" content=\"Fin2me\" \/>\n<meta property=\"article:published_time\" content=\"2021-03-08T11:24:37+00:00\" \/>\n<meta name=\"author\" content=\"Mark\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/fin2me.com\/wp-content\/uploads\/2021\/03\/cnewsfotor124.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mark\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/fin2me.com\/markets\/boj-deputy-governor-amamiya-says-yields-can-move-more-but-not-too-much\/\",\"url\":\"https:\/\/fin2me.com\/markets\/boj-deputy-governor-amamiya-says-yields-can-move-more-but-not-too-much\/\",\"name\":\"BOJ deputy governor Amamiya says yields can move more - 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