TOKYO : A recent steady rise in long-term interest rates is unlikely to make the Bank of Japan tweak its yield target as it can use other tools to moderate any unwelcome rise in borrowing costs, according to sources familiar with the central bank's thinking.
"The 10-year yield is still moving within the band the BOJ sets around its target," one of the sources said."Recent moves aren't something to fret too much about," another source said. A steeper yield curve was precisely what the BOJ aimed for when it conducted a review of its policy framework last March to address the rising costs of prolonged easing.
BOJ officials have not ruled out the idea of targeting shorter-dated yields. But Governor Haruhiko Kuroda has said any such move would only become an option when conditions fall in place to debate an exit from the central bank's ultra-easy monetary policy.