MNI BRIEF: BOJ's Kuroda: Fixed-Rate JGB Ops Were Appropriate

Bank of Japan Governor Haruhiko Kuroda, speaking to the lower house of parliament on Tuesday, said the unlimited offer to purchase of Japanese Government Bonds (JGBs) at a fixed-rate on Monday had the intended effect.

“It is appropriate for the BOJ to maintain easy policy as Japan’s consumer price index only rose 0.5% y/y (in December),” Kuroda told lawmakers. He noted that the benchmark 10-year JGB yield fell to 0.22% on Monday from Friday’s 0.230%. On Monday, the BOJ conducted an unlimited purchase of JGBs at a fixed-rate of 0.25% to curb higher JGB yields amid the rise in overseas bond yields but no financial institutions that took part in the operation.

He added that foreign exchange moves are based on various factors, such as the global economy and financial markets, and not determined by only the direction of monetary policy and an interest rate gap.

“The weak yen pushes up import prices but its impact isn’t big now,” Kuroda said.