MNI BRIEF: BOJ To Discuss YCC Tweak, Rates Over 0.5%: Press

The Bank of Japan will discuss tweaking its yield curve control policy at a policy board meeting Friday to let long-term interest rates rise beyond its cap of 0.5% by a certain degree in what would be a shift toward a more flexible policy approach, the Nikkei reported on Friday.

Under its yield curve control, the central bank buys large quantities of Japanese government bonds if 10-year yields look likely to go beyond its allowable range of 0.5% below or above zero, resulting in market distortions. The proposed change would keep the rate ceiling, but allow for moderate rises beyond that level, it said.

Under the more flexible policy being considered, the BOJ would permit gradual increases above the 0.5% threshold, but still clamp down on any sudden spikes. That would allow it to rein in fluctuations driven by speculators.

The BOJ will release the meeting results and the Outlook Report after 1130 JST (0230 GMT).