Is the BoJ doing the twist?

Today’s shift in the Bank of Japan’s bond purchases shouldn’t be interpreted as a signal that the 10-year target will be raised anytime soon. Note added post-publication: In this Update, we suggest that the increase in BoJ purchases “looks rather odd”. We have since realised that there is a prosaic explanation: the BoJ has also reduced the frequency of its auctions from six per month to five. The increase in purchases at today’s auction simply offset that switch. The broader point remains: investors should be looking to the Policy Board for any changes in monetary policy rather than operational tweaks instigated by the Financial Markets Department.