Our Privacy Statment & Cookie Policy
All LSEG websites use cookies to improve your online experience. They were placed on your computer when you launched this website. You can change your cookie settings through your browser.
In an effort to sustainably hit its 2% inflation target, the Bank of Japan (BoJ) has a yield curve control policy, which consists of buying unlimited amounts of 10-year government bonds to limit their yield to 0%, with a cap of 0.25%. The current global environment of high inflation and rising interest rates has put this policy under severe pressure, with the yen falling to 24-year lows against the US dollar, leading to soaring import prices and inflation. Core price pressures are also rising, and inflation expectations are at record levels, which increases the risk of inflation getting entrenched in the economy and the BoJ missing its target. Such an outcome would heighten the risk of a crisis, including in the public finances, as higher yields would increase the burden of interest expenses significantly. Japan was the first country worldwide to enter a permanent state of zero interest rate policy and the first to undertake QE – how events unfold there may offer clues about a possible eventual endgame for other highly indebted DM economies.
Refresh this chart in your browser | Edit the chart in Datastream
The views expressed in this article are the views of the author, not necessarily those of Refinitiv Lipper or LSEG.
Join a growing community of asset managers and stay up to date with the latest research from Refinitiv and partners to help you inform your investment decisions. Follow our Asset Management LinkedIn showcase page.
_________________________________________________________________
Financial time series database which allows you to identify and examine trends, generate and test ideas and develop view points on the market.
Refinitiv offers the world’s most comprehensive historical database for numerical macroeconomic and cross-asset financial data which started in the 1950s and has grown into an indispensable resource for financial professionals. Find out more.
The Chicago Board of Exchange’s volatility index, simply known as VIX, flickered into ...
Developed markets are gradually converging towards their old, pre-COVID economic trends ...
U.S. retail sales smashed expectations in March, with total sales (mkt +0.3% m/m) up ...
US inflation accelerated to 3.5% on an annual basis in March, up from 3.1% the previous ...