The Tokyo Stock Exchange’s Nikkei 225 index closed 2.50% higher after Haruhiko Kuroda-led Bank of Japan’s decision not to make any changes to its YCC-yield curve control policy .
The BoJ, white fly among the main central banks in the world for the ultra-expansionary monetary policy that it continues to pursue – based on negative rates and on an unleashed QE to say the least – has also announced that it has left the cost of money unchanged at -0 .1%, thus also confirming its negative interest rate policy.
As regards the control of the yield curve, the central bank of Japan has announced that the tolerated fluctuation range of Japanese government bond rates will remain unchanged, after the change made in December.
Thus the target on the Made in Japan interest rate range was reiterated, changed in the December meeting from the previous range between -0.25% and 0.25% to the new band between -0.5% and +0 .5%.
Bets on a BOJ turnaround had sent 10-year Japanese government bond yields soaring above their maximum allowable target (0.5%) several times in recent sessions.
Following today’s announcement by the Bank of Japan, bond rates immediately tumbled to 0.385%.
The Bank of Japan’s failure to act hawkish immediately translated into a sharp decline in the yen, with the USD-JPY rallying 2.6% to JPY 131.47.
With regard to the other Asian stock exchanges, the Sydney Stock Exchange rose by 0.10%; the Hong Kong and Shanghai stock exchanges moved little, slightly up. The Kospi of the Seoul Stock Exchange falls by 0.64%.