Keep it vague

31 July 2018 By Pete Sweeney Follow @petesweeneypro

Governor Haruhiko Kuroda has pledged to keep rates very low for an extended period to calm investors’ concern that monetary policy may become less loose. The no-cost tactic to keep bond yields in check is born of necessity given how many assets the central bank is already buying.

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The Bank of Japan said on July 31 it would keep interest rates very low “for an extended period of time” and took measures to make its stimulus programme more flexible.

The Japanese central bank kept its policy rate at minus 0.1 percent, and made no change to its target of keeping 10-year government bond yields around zero. However, it said would adopt a more flexible approach to managing benchmark bond yields and allow long-term yields to fluctuate more.

The BOJ said it would adjust its purchases of exchange-traded funds to purchase more ETFs "issued by firms that are proactively investing in physical and human capital," specifically those tracking the Tokyo Stock Price Index (TOPIX).

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