Yen Slides as BOJ Largely Stands Pat but Tweaks Yield Cap
![](https://japannews.yomiuri.co.jp/wp-content/uploads/2023/10/2023-09-21T040008Z_402622899_RC22C3AX6ZX0_RTRMADP_3_JAPAN-ECONOMY-POLL.jpg)
Bank of Japan in Tokyo, Japan September 20, 2023
13:59 JST, October 31, 2023
SINGAPORE, Oct 31 (Reuters) – The yen weakened on Tuesday after the Bank of Japan (BOJ) maintained ultra-low rates but made a small tweak to its bond yield control policy, disappointing speculators who had expected more from the central bank as price pressures persist.
At the conclusion of its two-day policy meeting, the BOJ said that it would keep the 10-year government bond yield around 0% set under its yield curve control (YCC), but re-defined 1.0% as a loose “upper bound” rather than a rigid cap.
It also removed a pledge to defend the level with offers to buy unlimited amount of bonds.
Nonetheless, the yen slid nearly 0.7% against the dollar, past the 150 per dollar threshold to hit an intraday low of 150.12. It later pared some of those losses to stand at 149.95.
The euro similarly jumped about 0.5% against the yen following the decision. The single currency last bought 158.87 yen.
It looks like the BOJ is slowly progressing towards YCC removal, so this is part of a series of moves for more flexibility as global yields stay elevated, said Jeff Ng, head of Asia macro strategy at SMBC.
Maybe markets were expecting more, or it could also be a (matter of) buy the rumor, sell the fact.
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