Trouble in paradise for the BOJ? That seems to be the case with its attempt to stick with yield curve control:
10-year JGB yields are creeping up above the 0.25% mark to 0.255% and is holding there with 30 mins left until the cash market close in Tokyo. As a reminder, the BOJ has an implied cap for yields at 0.25%.
They already have unlimited offers to bid 10-year JGBs at yield of 0.25% but have now announced that they will also be buying up the belly of the curve tomorrow.
The central bank says that it will conduct an additional set of purchases of ¥500 billion on notes with maturity of more than 5 years and up to 10 years.
This will be a key area to watch in the week ahead to see how much the BOJ will throw to keep its yield curve control policy intact.
