TOKYO (Reuters) – The Bank of Japan on Wednesday maintained ultra-low interest rates, including its 0.5% cap for the 10-year bond yield, defying market expectations it would phase out its massive stimulus programme in the wake of rising inflationary pressure.
Here are some comments from experts:
KEISUKE TSURUTA, FIXED INCOME STRATEGIST AT MITSUBISHI UFJ MORGAN STANLEY SECURITIES, TOKYO:
“I feel like we were sidestepped by the BOJ. Investors will probably start buying bonds (after the market opens) but the buying will be limited because there may be another move by the BOJ in the future as the yield curve remains distorted.”
CHRISTOPHER WONG, CURRENCY STRATEGIST AT OCBC, SINGAPORE:
“I rather they abandon, or don’t do anything at all.”
“With expectations running high, a no move would disappoint JPY bulls and weakness can return. But this is likely to be temporary as focus shifts to next MPC in March when Kuroda chairs his last.”
TARECK HORCHANI, HEAD OF DEALING, PRIME BROKERAGE AT MAYBANK SECURITIES, SINGAPORE:
“As expected by most economists, BOJ maintained its yield curve control and the previous move to widen the trading band was more to create a more efficient market, which didn’t work as the market expected a change of policy and pushed BOJ to buy even more bonds.”
“The knee-jerk reaction has been a reversal in the USD/JPY short position ahead of the BOJ meeting and pushing USD/JPY 2% higher at 130.50.”
(Reporting by Reuters Rae Wee in Singapore and Junko Fujita in Tokyo; Editing by Rashmi Aich)
