Market pressure on Yield Curve Control intensifying

Deputy Governor Amamiya’s reason for rejecting the governorship has made clear that the government wants to pivot away from the ultra-easy monetary policy of the past decade. As a result, market bets on the end of Yield Curve Control are likely to gather force, which means defending YCC until the April meeting could further set back the BoJ’s objective of improving bond market functioning. We therefore think it’s plausible YCC will be dropped at the March meeting.