Bank of Japan Signals Limited Intervention Despite Rising Bond Yields

Governor Kazuo Ueda emphasizes market-driven interest rates but affirms readiness for emergency measures if yields spike sharply.

Japanese government bond yields have steadily risen, with the 10-year yield reaching a 15-year high of 1.44% this week, driven by expectations of further rate hikes and strong economic data.
BOJ Governor Kazuo Ueda reiterated the central bank's commitment to allowing market forces to determine long-term interest rates, a shift from its previous interventionist policies.
The BOJ has set a high threshold for emergency bond purchases, reserving such measures for abrupt, abnormal market movements that destabilize yields.
The central bank is gradually tapering its bond-buying program, aiming to halve monthly purchases to 3 trillion yen by March 2026, as part of its strategy to reduce its massive balance sheet.
Analysts suggest that rising yields could prompt a reevaluation of the BOJ's tapering plans, but Ueda has indicated no immediate concerns about the current pace of increases.