The Bank of Japan's decision Friday to make its yield cap program more flexible may provide the central bank with some room to see if price dynamics are indeed changing and wage growth is continuing to accelerate — the recipe for finally attaining its 2% inflation goal.
Some economists viewed the BOJ's move to allow long-term yields to rise above its ceiling as an "effective scrapping" or "gutting" of its yield curve control program launched in 2016. Others took it as a step toward ending the central bank's ultraeasy monetary policy altogether.
The architect years ago of the central bank's "forward guidance" regarding future monetary policy, Gov. Kazuo Ueda has persisted with its stance of maintaining ultralow rates.