BOJ notes show split over 10-year yield target

TOKYO–A summary of opinions of the Bank of Japan’s policy makers at its recent board meeting released Wednesday showed some members favor a slightly different range for the 10-year Japanese government bond yield target.

"It is appropriate to bear in mind that the long-term yields may move upward and downward at about double the range of around plus or minus 0.1%," one of the BOJ’s nine policy board members said, according to the summary of the board’s meeting on July 30-31.

The comment was in line with Gov. Haruhiko Kuroda’s remark after the meeting that the bank would let the 10-year yield rise as high as 0.2%.

In its policy statement, however, the BOJ only said "yields may move upward and downward to some extent mainly depending on developments in economic activity and prices" and didn’t mention any specific figures.

The meeting summary showed that one member said the 10-year yield could move upward and downward by around 0.25%, while another member said allowing a wider range may lead to an increase in real interest rates and weaken prices.

At the July meeting, two of the bank’s board members, Yutaka Harada and Goushi Kataoka, dissented from adding the new passage about yield fluctuations in the statement. Both members are advocates of strong measures to generate inflation, and both said they feared the move for more flexibility on the zero yield target, however slight, could confuse markets.

The summary of opinions submitted by board members to Gov. Haruhiko Kuroda doesn’t identify the members by name. The BOJ releases the summary of opinions in addition to minutes of the meetings as part of its efforts to improve communications with the public.

-Write to Megumi Fujikawa at [email protected]

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