5 things you need to know about BOJ's Monetary Policy Meeting
1. Yields: Continued to peg 10-year JGB yield at "around zero", but widened the trading bond of 10-year JGB to plus minus 0.25%
2. Purchase of ETF: Ditched its 6 trillion yen guide for annual purchases of ETF , however, it will continue to buy equities as necessary with upper limits of about 12 trillion yen.
3. Interest Scheme to Promote Lending: Established the scheme as an incentive to financial institutions' currenc account balances. The applied interest rates will be linked to the short-term policy interest rate.
4. Short-term policy interest rate: Applied a negative interest rate of minus 0.1 percent to the Policy-Rate Balances
5. Inflation-overshooting commitment: The Bank commited to cotinuing to expand the monetary base until the YOY increase of CPI exceeds the price stability target of 2 percent.
MM Analysis
The NI225 dropped by almost 1.5% followed by the BOJ's announcement of scraping the ¥6tn guideline and widending the trading bond of 10-year JGB. While we believe, the BOJ's recents move attempted to conduct the Yield Curve Control (YCC) policy more flexibily, keep an eye on the inflation!
2. Purchase of ETF: Ditched its 6 trillion yen guide for annual purchases of ETF , however, it will continue to buy equities as necessary with upper limits of about 12 trillion yen.
3. Interest Scheme to Promote Lending: Established the scheme as an incentive to financial institutions' currenc account balances. The applied interest rates will be linked to the short-term policy interest rate.
4. Short-term policy interest rate: Applied a negative interest rate of minus 0.1 percent to the Policy-Rate Balances
5. Inflation-overshooting commitment: The Bank commited to cotinuing to expand the monetary base until the YOY increase of CPI exceeds the price stability target of 2 percent.
MM Analysis
The NI225 dropped by almost 1.5% followed by the BOJ's announcement of scraping the ¥6tn guideline and widending the trading bond of 10-year JGB. While we believe, the BOJ's recents move attempted to conduct the Yield Curve Control (YCC) policy more flexibily, keep an eye on the inflation!
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