The Bank of Japan faces a dilemma: Should it take additional steps to stabilize turbulent financial markets or resolutely avoid a piecemeal approach to fulfilling its pledge to beat deflation with radical monetary easing?
The BOJ disappointed the markets on Tuesday by deciding not to adopt new measures to contain spiking yields in government bonds.
Afterward, BOJ Gov. Haruhiko Kuroda, in an apparent show of determination against makeshift responses to market confusion, stated that markets are expected to calm gradually as the economy recovers.