Bloomberg reports, citing people familiar with the matter
The report says that BOJ officials see a need to keep a lower limit on 10-year JGB yields, with some of them seeing that limit around -0.30%. Noting that some officials saw the drop in yields earlier this month as close to a point of requiring action.
Their view is that allowing yields to fall too freely would contradict the bank's policy pledge to target a level around 0% but would prefer not to communicate a figure as a line in the sand may trigger a reaction in markets to try and challenge it.
If that is the case, then this "leak" isn't going to be very helpful to the BOJ. In any case, it will be tough for the BOJ to challenge the overwhelming market trend if global bonds continue to rise in tandem over the next 12-18 months.
The worry for them is that a further drop in yields will keep the yen bid but I don't see how they can outright fight back against a global trend on their own. That's just a bit silly.
