The demise of yield curve control (YCC) has been the market’s focus for the Japanese central bank after its originator, the incumbent governor Haruhiko Kuroda, ends his second five-year term on April 8.
Although all but one forecast no surprise at Kuroda’s last rate-review this week, half of economists in the survey said Ueda will carry out additional tweaks within three months, if not a total abandonment, to the YCC such as widening a 10-year yield cap range from 0.5%.
Fourteen of 26 respondents to a question about the YCC expected the BOJ to terminate it this year, the Feb. 28-March 6 poll showed. Eight of them voted for April-June, four for July-September and two for October-December.
“Ueda has argued long-term yield control is a scheme that does not support fine-tuning,” said Hiroshi Namioka, chief strategist and fund manager at T&D Asset Management, who expects Ueda to scrap YCC at his first policy meeting in late April. “A drastic change…
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