Possible successor to BOJ Kuroda says expanding JGB YCC band will facilitate policy change

Takehiko Nakao is a former senior official in the Japanese Ministry of Finance. A former deputy finance minister in charge of international affairs (meaning he was in charge of yen intervention decisions). He is being touted as a candidate to replace Governor Haruhiko Kuroda next year when Kuroda’s term ends in April 2023.

Reuters publishes an article with comments from Nakao:

• “The BOJ was not so successful in raising inflation expectations and lowering real interest rates as the side effects became more prominent. I thought the current framework had to be changed sooner or later,” he said. he declared.
• “I’m not sure of the reason for the latest action, but it may have the effect of easing the burden of whoever succeeds Kuroda regarding any negative shocks resulting from the adjustments.
• “It was good in the sense that it reduced the burden of starting policy adjustment.”

Earlier today, we received more information from the BOJ on its decision to widen the December JGB tolerance band:

USD/JPY gained ground after:

From these positions, the Bank of Japan conducted an unanticipated purchase of JBG. This is part of the YCC and the implementation of a flexible policy.

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Also, as an update, from the People’s Bank of China

• now injects 183 billion yuan net

Bringing the total for the week so far to an injection of around 600 billion yuan. Part of that will be tied to ensuring ample liquidity in the new year.

Additionally, Hong Kong’s Hang Seng Index reopened today. It’s higher so far. Traders appreciate China’s new reopening measures: