BOJ’s Surprise Foreshadows End to Key Anchor for Global Yields
- Future policy normalization would impact assets across globe
- BOJ lays groundwork for a relatively orderly end to YCC
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The Bank of Japan finally appears to be preparing for an end to its controversial yield curve control program, a policy that has helped provide an anchor for interest rates around the world.
BOJ Governor Kazuo Ueda surprised investors on Friday by announcing the central bank would allow yields to rise above a ceiling it now calls a point of reference. That paves the way for a future normalization of policy that has implications for a wide range of global assets and for markets heavily exposed to Japanese money, even if investors need not panic for now.