BOJ To Buy Unlimited Government Bonds Starting Next Week

The Bank of Japan announced it would buy unlimited government bonds starting next week in a bid to defend its "yield curve control" goal. The action shows that the Bank of Japan will make a firm commitment not to allow the 10-year long-term bond interest rate to exceed 0.25%, and adhere to the current loose monetary policy, so as not to push up local borrowing costs and affect the pace of economic recovery amid rising global bond rates. After the announcement, Japan's 10-year bond yield fell slightly, but the 20-year and 30-year bond yields still rose, reflecting the market's expectation that the Bank of Japan may need to tighten policy in the future is still high.