The Bank of Japan on Wednesday kept its ultra-low interest rates unchanged while maintaining its 0.5% cap for the 10-year bond yield, reported Reuters.
The central bank defied market expectations it would phase out its massive stimulus program in the backdrop of rising inflationary pressure.
The Japanese stock market surged post the BOJ’s decision with the Nikkei index rising over 2% after the midday break.
Yields on 10-year Japanese government bonds declined to 0.395%, while yields on long-term bonds rose.
Saisuke Sakai, senior economist at Mizuho Research And Technologies said, “If I were [Governor Haruhiko] Kuroda, I would have changed YCC – or scrap it altogether – this time, so that I could have a serene March policy meeting, the last rate review for Kuroda,” according to the report.
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