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MNI INTERVIEW: June Cut To JGB Buys Possible For BOJ-Sakurai

(MNI) Tokyo
(MNI) TOKYO

The BOJ could also raise rates again by as early as July, a former board member says.

The Bank of Japan could reduce its purchases of government bonds from about JPY6 trillion per month to around JPY5 trillion by as early as June but it is likely to keep its policy interest rate unchanged at a range of zero percent to 0.1% until at least July given the contraction in first quarter GDP and the lack of immediate justification for a hike from price data, a former BOJ board member told MNI.

Even as the BOJ lowers the scale of JGB buying, stepping back in order to allow markets to determine yields, it will still pledge to continue to buy bonds in a flexible manner in order to curb any surges in long-term interest rates, Makoto Sakurai said in an interview.

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The Bank of Japan could reduce its purchases of government bonds from about JPY6 trillion per month to around JPY5 trillion by as early as June but it is likely to keep its policy interest rate unchanged at a range of zero percent to 0.1% until at least July given the contraction in first quarter GDP and the lack of immediate justification for a hike from price data, a former BOJ board member told MNI.

Even as the BOJ lowers the scale of JGB buying, stepping back in order to allow markets to determine yields, it will still pledge to continue to buy bonds in a flexible manner in order to curb any surges in long-term interest rates, Makoto Sakurai said in an interview.

Keep reading...Show less