BOJ Tweaks YCC For “Greater Flexibility”, Sending Bond Yields Soaring

• BOJ Tweaks YCC For “Greater Flexibility”, Sending Bond Yields Soaring
  by Tyler Durden, https://www.zerohedge.com/
  In a central bank decision that was a far more uncertain nailbiter than the Fed’s guaranteed 25bps hike, moments ago the BOJ revealed that in a unanimous vote it would keep rates at -0.1% and also keep the 10Y JGB yield target at 0%, but in an 8-1 vote (with Yakamura dissenting) said it would conduct yield curve control “with greater flexibility” (i.e. tweak it) by which it means that both the lower and upper bounds (but mostly upper) of yield control would be “references” not “rigid limits.”
  –
  What does that mean? Simple: while the BOJ is keeping the implied 10Y JGB target at 0.50%, it will allow the yield to rise as high as 1.0% (where it has a hard stop to buy all bonds that are for sale) but it also may not. This is how the BOJ explained it in its statement…:
  –
  The Bank will continue to allow 10-year JGB yields to fluctuate in the range of around plus and minus 0.5 percentage points from the target level, while it will conduct yield curve control with greater flexibility, regarding the upper and lower bounds of the range as references, not as rigid limits, in its market operations.
  –
  The Bank will offer to purchase 10-year JGBs at 1.0 percent every business day through fixed-rate purchase operations, unless it is highly likely that no bids will be submitted.
  –
  In order to encourage the formation of a yield curve that is consistent with the above guideline for market operations, the Bank will continue with large-scale JGB purchases and make nimble responses for each maturity by, for example, increasing the amount of JGB purchases and conducting fixed-rate purchase operations and the Funds-Supplying Operations against Pooled Collateral.
  –
  read more.

end