HALISTER1: BOJ May Switch Yield Curve Control to 5-Year From 10-Year: MS

BOJ May Switch Yield Curve Control to 5-Year From 10-Year: MS

(Bloomberg) -- Rising rates at front-end of JPY OIS market shows anticipation of early BOJ tightening, while expectations are increasing that current Yield Curve Control (YCC) could switch to the 5-year sector from 10-year, writes Morgan Stanley strategists including Koichi Sugisaki in a client note.
  • Possible switch in YCC has been aided by BOJ Deputy Governor Nakaso speech on Thursday that, if necessary, the shape of the yield curve will be adjusted depending on the outlook for future developments, economy, prices and financial conditions
  • CPI on Friday is worth more attention, as the outlook for the economy and financial situation looks positive, though low inflation is still preventing policy tightening from BOJ
  • NOTE: Former BOJ board member Kiuchi said last month the central bank could switch YCC from 10-year to 5-year part of the curve, no technical issues stopping this
To contact the reporter on this story: Stephen Spratt in Hong Kong at sspratt3@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Patricia Lui

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Koichi Sugisaki (Morgan Stanley)

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