BOJ wasn’t tightening policy when it raised bond yield cap, Noguchi says

The Bank of Japan raising its cap for the yield on 10-year Japanese government bonds to 1% from 0.5% in July wasn’t monetary tightening, board member Asahi Noguchi said Thursday.

The central bank will contain excessive rises in bond yields that aren’t backed by higher inflation expectations, Noguchi said.

He added that consumers would likely stay reluctant to spend until they become confident that real wages, adjusted for inflation, keep rising.

“It is the Bank of Japan’s mission for the time being to realize such a situation as soon as possible by patiently continuing monetary easing,” he said.

Recent government data showed that inflation-adjusted wages declined for a 17th straight month in August.

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