BOJ's Amamiya comments on yield curve control, negative rates

Author: Eamonn Sheridan | Category: Central Banks

 Masayoshi Amamiya is known inside the Bank of Japan as "Mr. BOJ"

He is Executive Director of the Monetary Affairs Department
  • Central banks can affect long-term interest rates to a significant extent
  • There is still uncertainty on how much central banks can control yields, respond to shocks
  • View that a central bank can directly control long term interest rates has been seen repeatedly in history
  • Considering desirable yield curve is very complicated process that warrants comprehensive review of various factors
  • BOJ's yield curve control aimed at beating deflation, not at minimising cost of fiscal policy by supporting bond prices
  • Markets seem to have responded smoothly to BOJ's new policy framework
  • Yield curve control policy exerting big effect on economy as global market conditions turn positive for Japan
  • BOJ's policy, which explicitly aims to control long-, short-term rates as a whole, is unprecedented globally
  • Further considerations, both theoretically and empirically, are essential in guiding yield curve control

Headlines via Reuters from Amamiya's Keynote Speech at the Financial Markets Panel Conference to Commemorate the 40th Meeting. Full (PDF) speech here