By Leika Kihara
TOKYO (Reuters) -The Bank of Japan has no plan now to change an implicit 0.25% cap set around its yield target, though a tweak in the future cannot be ruled out, governor Haruhiko Kuroda said on Wednesday.
Under yield curve control, the BOJ guides the 10-year Japanese government bond (JGB) yield around 0% as part of efforts to keep borrowing costs low and stimulate the economy.
The central bank clarified last year that it will allow the 10-year yield to move 25 basis points up and down each around the target.
“We have no plan now to change the band. But that’s not to say the band cannot change forever,” Kuroda told parliament.
The BOJ on Monday offered to buy an unlimited amount of 10-year JGBs at 0.25% to prevent rising global long-term rates from pushing up JGB yields too much.
“JGB yields were rising rather sharply reflecting higher overseas long-term rates. It was an unusual market situation,” Kuroda told parliament in explaining why the BOJ stepped in.
“If something similar happens again, we will of course resort to such a tool. But our basic stance is to buy sufficient amount of JGBs so that the 10-year yield moves 25 points up and down each around our 0% target,” he said.
(Reporting by Leika Kihara; Editing by Andrew Heavens and Christina Fincher)
