VIEW: BofAML writes that "now the BoJ has.......>

BOJ: VIEW: BofAML writes that "now the BoJ has started to pay attention to the

side effects of powerful monetary easing and the need for improvement of market

functions, it will probably try to avoid extreme yield declines and maintain the

current policy as long as the external environment does not deteriorate

significantly. Since late 2018, however, the topic of additional easing policies

available to the BoJ has come up more frequently because of the market sentiment

downturn and yen appreciation. Unfortunately, effective options appear to be

few. On 12 February, when instability still lingered in the market, the BoJ

reduced its purchase of JGBs with remaining maturities over 10yr and up to 25yr.

When this purchase operation was reduced, the yield curve was lower than in July

2018, when yield curve control (YCC) was tweaked. In fact, the yield curve had

declined to about its level of September 2016, when the BoJ carried out its

comprehensive assessment and introduced YCC. Having saddled itself with the

contradictory obligations of monetary base expansion, the YCC policy, and

improvement of JGB market functions, the BoJ will be pressed to make some

choices."