The Bank of Japan tweaked its yield curve control policy on Tuesday as Japanese yen fell below 150 against the greenback.
In the two-day meeting on Tuesday and Wednesday, the central bank is allowing more flexibility in its yield cap, saying that the target level of the 10-year Japanese government bond (JGB) yield will be held at 0%, but will allow the upper bound of 1% “as a reference.”
The central bank also scrapped reference to daily fixed rate JGB purchasing operations.
However, BoJ still maintained its short-term interest rate target at -0.1% and maintained 10-year JGB yield target around 0%.
Meanwhile, Japan’s industrial output rose 0.2% in September from a month earlier, which was a significant drop from the anticipated gain of 3.7%.
The Japanese yen dropped slightly lower than 150 against the US dollar after the announcement, then rose to around 150.03 as the session progressed.
