MNI BRIEF: BOJ's Kuroda Downplays Impact of Wider 10-Yr Band

Bank of Japan Governor Haruhiko Kuroda dismissed claims that widening the range on the 10-year bond yield to 50bp would have an adverse impact on the economy.

Kuroda told reporters that real interest rates are falling as inflation rates are rising despite the BOJ's decision to widen the 10-year band.

He added that the decision to widen the band was aimed at fixing distortions of the yield curve, which will improve corporate financing.

Kuroda didn't rule out the possibility that market participants would see further widening of the 10-year range but it would depend on prices and financial market conditions at that time, adding that sustainable rises in interest rates are unlikely.

He maintained the view that Japan’s core CPI will likely fall below 2% in fiscal 2023, although there may be an update on how the BOJ board views fiscal 2023 inflation in January's Outlook Report.