BOJ’s Kuroda: Watching forex moves carefully as they affect economy, prices
The Bank of Japan (BOJ) is watching forex moves carefully as they affect the economy and prices, the central bank Governor Haruhiko Kuroda said in a scheduled speech on Tuesday.
Additional quotes
The yen, dollar, euro moves have been stable as BOJ, Fed, ECB all guide monetary policy to achieve 2% inflation.
Hard to explain rapid yen rise in 2011 just by gap in monetary base between Japan, other economies.
Recent rise in global yields likely reflect optimism over economic recovery but COVID-19 developments remain biggest risk on outlook.
The yen used to spike as investors sought it as safe-haven currency in times of market turbulence, favourable that is no longer the case.
Japan's real interest rate has been flat as a trend, nominal long-term rate has been stable around 0%.
Average duration of BOJ’s JGB holdings has shorted somewhat but this is not intentional, only a result of 'balanced' purchases of bonds across all durations.
BOJ has been saying excessive fall in super-long JGB yields could have impact on insurers, pension funds.
It's important to keep entire yield curve stably low, keep bond market stable as economy still hit by damage from COVID-19.
No need to change the YCC framework.
Market reaction
The yen shows little reaction to Governor Kuroda’s comments on the yield curve framework, as USD/JPY keeps it range around 109.20, as of writing.
The spot adds 0.07% on the day.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
