BOJ’s Kuroda to consider steps to calm bond market

Bank of Japan Governor Haruhiko Kuroda yesterday said that the Central Bank will consider extending the duration of its fixed-rate market operation in the future if necessary to stem any possible spike in bond yields.

“With our efforts to give more flexibility to our market operations, volatility in the bond market has stabilised,” Kuroda told a news conference.

“So there was no imminent need to decide on a new tool now,” he said, explaining the decision to hold off on extending the maximum duration for the Central Bank’s fixed-rate lending via market operations beyond the current one year.

Kuroda said he did not see much room to sharply increase the BoJ’s buying of real estate investment trusts (REITs) in the short term because the Japanese market is still small.

The BoJ kept monetary policy steady and held off on taking further steps to curb any future spike in bond yields yesterday, judging that the recent market turbulence has yet to pose severe damage to the economy’s recovery prospects.