BOJ Is Wary of Yield Target Hike Even If CPI Hits 1%
- Officials are said to see big risks in moving too early
- Managing yields around the 0% target is seen as feasible
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Bank of Japan officials would rather be late than early in raising their 10-year bond yield target from zero percent, even if consumer price gains reach 1 percent later this year, according to people familiar with the central bank’s discussions.
Officials see considerable risks in moving too quickly and are mindful of policy exits in 2000 and 2006, said the people, who asked not to be named because the talks are private. These exits were criticized for coming too soon and prolonging deflation. BOJ officials would want to first confirm that the underlying inflation trend is improving and view it as important to look beyond the impact of higher oil prices and a weaker yen, which have the potential to change quickly.