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BOJ won't try to push down super-long yields: Kuroda 

October 27, 2016

Leika Kihara, Reuters

Bank of Japan Governor Haruhiko Kuroda said on Thursday the central bank would not try to push down super-long government bond yields - even if they rise further - because it is focused on controlling the yield curve for out to 10 years.

Kuroda told parliament he saw no immediate need to change the minus 0.1 percent short-term interest rate target and the 10-year government bond yield target of around zero percent, suggesting that the BOJ will hold off on easing policy at next week's rate review.

Kuroda also rejected the idea of buying foreign-currency denominated bonds, something that some advisors to the government think would be a viable option to weaken the yen, because this would amount to currency intervention.

Excessive falls in super-long yields would narrow margins for investors like pension funds and life insurers, which are among the costs of the BOJ's massive stimulus program identified at the central bank's comprehensive assessment of its policies last month.

"We don't think it's desirable for the yield curve to flatten," Kuroda told parliament. "It won't be surprising to see super-long bond yields rise a bit more. 

 

 
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