MNI BRIEF: BOJ's Kuroda Sees No Need To Widen 10-Yr Range

Bank of Japan Governor Haruhiko Kuroda said he doesn’t see the need to further widen the band around the 10-year yield target now and underscored the need to maintain easy policy to support the economy.

“I don’t see the need to further widen the range of the 10-year interest rate,” Kuroda told reporters after the BOJ left its monetary policy settings unchanged on Wednesday. (See MNI BRIEF: BOJ On Hold; Keeps Forward Guidance; Expands Ops). The BOJ shocked markets in December when it widened the band around its 10-year yield target to 50bp from 25bp.

He added that the BOJ will conduct daily operations, including the Fund-Supplying Operation against Pooled Collateral, in a flexible manner to stabilise financial markets.

“Core CPI rose above 3% but it is expected to fall below 2% in the middle of fiscal 2023,” Kuroda said.

He added that the underlying trend of prices, measured by the output gap, the expected inflation rate, and wages was likely to strengthen gradually.

But the achievement of 2% price target in a stable and sustainable manner hasn’t came into sight now and the BOJ needs to support economy to create an environment that enable firms to raise wages with easy policy.