TOKYO: Japanese government bond yields stuck to recent narrow ranges on Friday, as the new Bank of Japan chief again reiterated his intention to keep ultra-easy policy settings in place for the time being.
The 10-year JGB yield was flat at 0.455%, having strayed only one basis point either side of that level since April 5.
Benchmark 10-year JGB futures slipped 0.04 yen to 147.64, trading in the center of a 0.46-point range since April 3.
BOJ Governor Kazuo Ueda, who took over the job from Haruhiko Kuroda at the start of this week, said at a news conference on Thursday that he told G-20 counterparts that Japan’s central bank will keep stimulus unchanged as it forecasts inflation will slow back below its 2% target in the second half of the year.
The comments repeat what he said a day earlier about the risk of failing to achieve the inflation target outweighing the risk of falling behind the curve in curbing price growth.
That’s even as the International Monetary Fund urged the BOJ to allow long-term yields - now pinned within 50 basis points either side of zero under the yield curve controls (YCC) - to move more flexibly.
“New Governor Kazuo Ueda has shown absolutely no urgency to revise YCC,” Yasunari Ueno, chief markets economist at Mizuho Securities, wrote in a client note.
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“Does that mean YCC can remain in its current form, without further revision, for an extended period? We still think that is unlikely but cannot rule it out.”
Economists generally expect some tweaks to YCC may be possible at Ueda’s second meeting in charge in mid-June, forgoing a change at the gathering later this month. On Friday, superlong yields - which are less constricted by BOJ policy - followed US yields higher.
The 20-year JGB yield edged up 1 basis point to 1.050% and the 30-year JGB yield rose 1.5 basis points to 1.305%.
The two-year yield added 0.5 basis point to -0.050%, while the five-year yield fell 0.5 basis point to 0.150%.
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