Rate expectations influence BoJ’s yield control – paper
Bond purchasing programme less effective when market unsure of future monetary policy path
The effectiveness of the Bank of Japan’s yield curve control strategy is influenced by market participants’ expectations of the future policy rate, a research paper from the central bank has argued.
The paper, published on May 16, looks at how the BoJ’s purchases of Japanese government bonds (JGBs) affect yields after taking into account the market expectations of future interest rates.
The authors – Kohei Maehashi, Daisuke Miyakawa, Takatoshi Sasaki and Taihei Sone – use Japan’s overnight index
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