Even as its liquidity provision passes its 25th year, the Bank of Japan looks unlikely to tighten monetary policy in step with other central banks until deflation is beaten and the Ministry of Finance can end its reliance on ultra-low yields to control government debt costs. Neither of these looks likely to happen in the new governor’s five-year term starting on 9 April, and possibly beyond it. This dependence was evidenced in November when the BoJ intervened to support the yen as rates rose elsewhere. It was followed in December by the only 25 basis point rise in the bank’s 10-year government bond yield target, to ... (full story)