My subscription
My Subscription All Publications

BoJ still likely to tweak Yield Curve Control

The Bank of Japan remained under pressure to defend its yield target this week and pledged on Thursday to keep buying an unlimited amount of bonds for as long as necessary. While 10-year JGB yields have dropped below the upper end of the Bank’s tolerance band for now, we think they will soon rise again as overseas yields continue to surge. Accordingly, we still expect the Bank to widen the tolerance band over the coming months.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
Continue reading

More from Japan

Japan Data Response

Japan External Trade (Jul. 2022)

Japan’s trade deficit widened to a record high in July but it should start to shrink over the coming months as supply shortages and commodity prices continue to ease. Asia Drop-In (25th Aug.): What’s the economic impact of a weak yen? What does the latest China-Taiwan flare-up mean for decoupling? How ugly are conditions in China’s real estate sector? Join economists from across our Asia services for this regular briefing on the region’s big investment stories. Register now.

17 August 2022

Japan Data Response

Japan GDP (Q2 2022 Preliminary)

Japan’s economy grew in Q2 driven mainly by private consumption, though the overall figure disappointed mainly due to fluctuations in stockbuilding that won’t last. The recovery should persist through Q3 and Q4, though the pace will slacken a bit, as strong investment momentum is offset by a more subdued consumption outlook. We expect GDP to return to its pre-virus trend before long.

15 August 2022

Japan Economics Weekly

Demographic woes persist, tourists waiting at the gate

An exodus of long-term migrants contributed to the 0.6% fall in Japan’s population last year but with border controls loosened since March net migration is bouncing back strongly. Even so, we still see GDP growth settling around 0.5% over the longer-term as a shrinking workforce offsets productivity gains. Meanwhile, Japan remains a highly popular tourist destination and once the onerous procedural requirements for entry are lifted, probably sometime in Q4, tourist arrivals and spending should rebound strongly.

12 August 2022

More from Marcel Thieliant

RBA Watch

RBA to hike aggressively as inflation surges

The surge in inflation would warrant a rate hike at the Reserve Bank of Australia’s upcoming meeting on 3rd May. But we think the Bank will wait until the June meeting, where we now expect the cash rate to rise to 0.50% We expect rates to reach 2% by the end of this year and 2.5% by mid-2023, which would be a bit more aggressive than the Bank’s last two tightening cycles.

27 April 2022

Australia & New Zealand Data Response

Australia Consumer Prices (Q1 2022)

Inflation surged in Q1 and is on track to surpass 6% later this year, exceeding the levels reached around the GST hike in 2000. With trimmed mean inflation already higher than at the start of previous tightening cycles, the Reserve Bank of Australia may opt for a 50bp hike at its June meeting.

27 April 2022

Japan Economics Update

BoJ to widen 10-year yield tolerance band further

With US Treasury yields set to keep rising over the coming year, it will become even more difficult for the Bank of Japan to defend its target for 10-year JGB yields. While we don’t expect the Bank to abandon Yield Curve Control altogether, we think it will widen its tolerance band further, perhaps to ±50bp.

26 April 2022
↑ Back to top