The Bank of Japan decided in its meeting that ended this morning, Tuesday, December 20, to adjust the yield ceiling for ten-year bonds in order to improve market performance, while it decided to keep negative interest rates unchanged by the unanimous vote of the bank members.
The bank is buying exchange-traded funds (ETFs) for 12 trillion yen and Japanese real estate investment J-REITs for 180 billion yen.
In a new step, the Bank of Japan will now allow yields on 10-year Japanese bonds to rise to about 0.50%, compared to the previous limit of 0.25%, in a surprising and unexpected move for the markets, which opened the door to rising expectations of an exit from the easing policy and the start of raising interest rates next year.
The Japanese yen rose against the US dollar to levels of 132.75, up by more than 450 points after announcing the statement, while the pound sterling rose against the yen by more than 500 points, as it traded at levels of 160.94.
02/11/2024
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