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J&J Drags on Dow, DJIA Underperforms

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Bank of Japan Governor Haruhiko Kuroda said Friday that the BOJ must keep yield curve at a low level as the economy is hit by downward pressures caused by the coronavirus. Kuroda told lawmakers that the BOJ will not raise the 10-year interest rate target from around zero percent (tolerated bands excepted).

His remarks are interpreted to mean that the BOJ will take action to curb higher bond yields if the 10-year JGB yield rises to near 0.200%, the upper level of the BOJ range. Recent market speculation has focused on the BOJ widening its accepted tolerance range, not amending the actual 0% target, and these comments don't change those potential dynamics.

Earlier Friday, the 10-year interest rate rose to 0.175%, the highest level since January 2016, before settling at 0.145%. This week, former BOJ head of markets Hiromi Yamaoka told MNI that the Bank's policy review was unlikely to do anything other than make modest tweaks to its bond buying program.

Benchmark 10-year JGB yields

SOURCE: Bloomberg