Japanese yen weakens as Bank of Japan makes no changes to yield curve range
People go to work in the morning in front of the Bank of Japan (BOJ) headquarters in Tokyo, Japan, on Monday, January 16, 2023. The Bank of Japan made no changes to its curve control policy. yield on Wednesday.
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The Japanese currency weakened against the US dollar after the Bank of Japan surprised the market by keeping the yield curve’s tolerance band unchanged.
The Japanese yen weakened 2.04% against the US dollar shortly after the decision was announced and last stood at 130.35, swinging at the highest level since June 2022.
“Japan’s economy is projected to continue to grow at a rate above its potential growth rate,” the Bank of Japan said in a statement. The central bank left interest rates unchanged at an extremely dovish -0.1% – in line with expectations and maintained the same rate held since 2016.
Its decision not to change its monetary policy came after the central bank caught global markets off guard in its previous meeting by extending its tolerance for 10-year government bond yields. year from 25 basis points to 50 basis points in December.
Since last month’s move, the 10-year JGB yield has repeatedly exceeded the upper ceiling.
The 10-year JGB yield surpassed the upper ceiling of the band for the fifth consecutive session on Wednesday morning and last stood at 0.507%.
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