TOKYO: The Bank of Japan’s Friday decision to make its yield curve control (YCC) more flexible was not deemed a shift in its monetary easing stance, Japan’s government ministers in charge of economic policy said on Tuesday.
By tweaking YCC, BOJ last week allowed the country’s interest rates to rise more freely in line with increasing inflation and economic growth, heralding the start of a slow shift away from decades of massive monetary stimulus.
Finance Minister Shunichi Suzuki told reporters he thought the central bank’s move would “increase the sustainability of monetary easing” by loosening its operations regarding the YCC scheme.
Economy minister Shigeyuki Goto said the move did not indicate a shift in BOJ’s accommodative stance.
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Chief cabinet secretary Hirokazu Matsuno also repeated the view, when asked about a ruling party lawmaker Hiroshige Seko’s Friday remark that the BOJ’s YCC tweak would “throw cold water on the economy”.
Regarding the currency market following the BOJ decision, “the government will closely monitor the forex trend, which has seen some changes in environment”, Suzuki said.
The yen softened on Monday, extending losses from a volatile post-BOJ trades, but it remained on track for its first monthly gain against the dollar since March.
The Japanese currency was traded at around 142.60 against US dollar on Tuesday morning.
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