In a surprise move, Bank of Japan loosens bond yield cap

Associated Press

The Bank of Japan broadened caps for a benchmark government bond yield, a surprise move that pushed bond yields higher globally and dinged Asian stocks. The central bank on Tuesday said that it would allow the yield curve on the 10-year Japanese Government Bond to range 50 basis points either side of its 0% target, up from the previous cap of 25 basis points. It did not mention inflation in its policy statement, but inflation has been running above the central bank’s 2% target rate. Japan had been a holdout among major industrialized nations in allowing yields to rise. Europe nations and the U.S. have been hiking rates aggressively to battle inflation.