MNI POLICY: BOJ Amamiya: Leaving Super-Long Yields Up To Mkt

     KYOTO, Japan (MNI) - Bank of Japan Deputy Governor Masayoshi Amamiya said

Thursday that the BOJ is leaving the fluctuations in the yields on super

long-term Japanese government bonds up to market forces.

     "We are controlling both the short-term rate (at -0.1%) and the 10-year

bond yield ("around" zero percent), and we are leaving the moves in super

long-term (over 10-year) bond yields up to the market," he reporters after

speaking to business leaders in Kyoto City, western Japan.

     Other key points from Amamiya's news conference:

     -- Asked about the recent rise in long-term interest rates since the BOJ

two-day policy meeting that ended Tuesday, Amamiya said, "It's premature to

assess the recent move in the 10-year bond yield because only a few days have

passed since the policy meeting."

     The 10-year bond yield rose to 0.125% Thursday for the highest level since

February 2017.

     -- Amamiya also said the BOJ board "largely" agreed on the new wider

trading range of +0.2% to -0.2% for the 10-year JGB yield, double the previous

unofficial range of +0.1% to -0.1%. It was not in the policy statement issued

after the board meeting but was announced by Governor Haruhiko Kuroda at his

news conference Tuesday.

     The nine-member board decided Tuesday in a 7-to-2 vote to make its

long-term interest rate target and asset purchases more "flexible," allowing the

nearly flat Japanese government bond yield to steepen slightly in line with

firmer growth and inflation.

     -- Amamiya said the expanded trading range for the 10-year bond yield will

not be altered by the BOJ's open market operation team.

     -- The output gap in positive territory -- firmer demand and tighter supply

-- is an important driver for inflation, he said.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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