Kuroda Shocks by Tweaking BOJ’s Yield Cap, Sparking Yen Jump

In accordance with the guidelines for market operations and asset purchases decided at the Monetary Policy Meeting today, the Bank of Japan has decided to implement following ...

At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided to modify the conduct of the yield curve control in order to improve market functioning and encourage a smoother formation of the entire yield curve, while maintaining accommodative financial conditions. Since early spring this year, volatility in overseas financial and capital markets has increased and this has significantly affected these markets in Japan. The functioning of bond markets has deteriorated, particularly in terms of relative relationships between spot and futures markets. Yields on Japanese government bonds (JGBs) are reference rates for corporate bond yields, bank lending rates and other funding rates. tweet at 10:01pm: BoJ Keeps Monetary Policy Steady -Maintains Short-Term Interest Rate Target At -0.1% -Maintains 10-Year JGB Yield Target Around 0% tweet at 10:08pm: BOJ EXPANDS RANGE FOR 10-YEAR JGB YIELD FLUCTUATIONS TO PLUS AND MINUS 0.5 PCT POINTS FROM CURRENT PLUS AND MINUS 0.25 POINTS #BOJ #Japanecon #interestrates tweet at 10:01pm: BOJ MADE DECISION ON YCC BY UNANIMOUS VOTE - https://t.co/wXVagA44VK tweet at 10:09pm: BOJ: BOJ WILL SIGNIFICANTLY INCREASE JGB PURCHASING AMOUNT.

tweet at 10:53pm: BOJ ANNOUNCES UNSCHEDULED BOND BUYING OPERATION tweet at 10:52pm: BoJ Offers To Buy JPY600Bln Worth Of JGBs: -JPY100Bln 1-3 Year -JPY100Bln 3-5 Year -JPY300Bln 5-10 Year -JPY100Bln 10-25 YearBank of Japan announces an unscheduled JGB buying operation. JGB have plunged, Futures halted: Osaka Exchange halts JGB futures trade - limit down. There is no halt in the physical JGB market though where the slamming has continued. The Bank of Japan has stepped in to stem the losses, or at least slow them. • Offers to buy up to JPY 100bn in 1-3yr JGBs. • JPY 100bn in 3-5yr JGBs. • JPY 300bn in 5-10yr JGBs. • JPY 100bn in 10-25yr JGBs.