April 9 (Bloomberg) -- Japanese Prime Minister Shinzo Abe said large-scale government bond purchases by the Bank of Japan could have a substantial effect on the market and that he expects new Governor Haruhiko Kuroda to communicate effectively to improve stability.
Abe was responding to questions from opposition Democratic Party of Japan lawmaker Kazuya Tamaki today about volatility in the JGB market on April 5, a day after the BOJ decided to double monthly bond purchases and extend the maturity of bonds it buys.
“He has great skill at communicating with the markets and the international community,” Abe said of Kuroda. “I expect him to improve stability through close communication,” Abe told a parliamentary committee.
Abe picked Kuroda as BOJ governor to push through his plans for bold monetary easing in a bid to shake off 15 years of deflation. He was approved by parliament last week for a five-year term.
The yield on the benchmark 10-year note fell to 0.315 percent on April 5, the lowest on record, before rising later in the day. Bond futures plunged, causing the Tokyo Stock Exchange to issue circuit breakers twice for the contracts.
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