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BOJ board disagreed on how much yields can move freely: July meeting summary

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BOJ board disagreed on how much yields can move freely: July meeting summary

BOJ board disagreed on how much yields can move freely: July meeting summary
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Kim Kyung Hoon(Reuters)
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TOKYO (Reuters) - Bank of Japan board members disagreed on how much long-term interest rates should be allowed to move away from the central bank's target when they crafted steps to make its policy framework more sustainable, a summary of opinions at last week's rate review showed on Wednesday.

At the July 30-31 policy meeting, the BOJ kept its pledge to guide long-term interest rates around zero percent but said it would allow yields to move more flexibly.

BOJ Governor Haruhiko Kuroda told a post-meeting briefing that the bank would allow long-term yields to move at double the previous range of around minus 0.1 percent to 0.1 percent.

One board member, however, argued that the BOJ should allow yields to move upward and downward by around 0.25 percent, referring to recent yield moves in other major economies, the summary showed.

"Controlling the long-term yields in a flexible manner is likely to contribute to maintaining and improving market functions. Even if interest rates rise somewhat from the current level, its effects on economic activity and prices are likely to be limited," the board member was quoted as saying.

(Reporting by Leika Kihara; Editing by Chang-Ran Kim) ((leika.kihara@thomsonreuters.com; +813-6441-1828; Reuters Messaging: leika.kihara.reuters.com@reuters.net)

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