-- The Bank of Japan’s Kazuo Ueda is in a tight spot. If he stands pat on policy this week he risks sending the yen to a multi-decade low and opening up his yield control program to speculative attack in the market.Canada Plans College Crackdown Amid Foreign Student Troubles
Most economists surveyed by Bloomberg think Ueda wants to see more evidence of wage growth and a more solid price trend before scrapping the BOJ’s negative interest rate next spring. Three-quarters of them think he can do that without adjusting policy settings during the two-day gathering that concludes on Tuesday.
The extra bond purchases also raise questions about the effectiveness and even the viability of the bank’s easing program. The surprise acceleration in Tokyo consumer inflation in October will add pressure on policymakers. Friday’s data, a leading indicator for national trends, showed that prices excluding fresh food rose 2.7% in the capital.
There are various options for adjusting the YCC settings if changes are made. They include simply raising the rate for daily fixed rate operations from the current 1%, scrapping a 0.5% reference point on yield movements and adjusting how the bank conducts the policy on a daily basis, according to the people familiar.
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