Bank of Japan announces adjustments to yield curve control, allowing Japanese government bond yields to rise by over 1 percent.

Bank of Japan announces adjustments to yield curve control, allowing Japanese government bond yields to rise by over 1 percent.

Financial market portal sumikai.com reports that the Bank of Japan (BJO) has announced further adjustments to its yield curve control policy. This decision allows 10-year Japanese government bond yields to rise above 1 percent. The BJO has been sticking to its Yield Curve Control (YCC) policy for some time, which involves buying government bonds to control interest rates. The previous cap on long-term interest rates of 0.5 percent was raised to 1 percent in July to address inflationary pressures and volatility.

This decision may have an impact on the market and the financial industry. Raising interest rates could raise bond yields, which could lead investors to put more money into Japanese bonds. This could strengthen the Japanese bond market and cause the yen to appreciate. As a result, purchasing power abroad would increase.

The higher returns could also harm Japanese workers as they face slow wage increases and rising import costs. However, rising yields could also lead to positive developments, such as higher interest rates for savers.

The BJO reiterated its ultra-loose monetary policy, which will continue until a cycle between wage increases and rising prices is established. The central bank also revised up its inflation forecasts, stressing that Japan's economy will continue to recover moderately.

According to a report by sumikai.com