According to the minutes of the meeting, the Bank of Japan Committee had held heated discussions on the possibility of adjusting the yield curve control in June.
Although the nine-member committee ultimately decided to keep the policy unchanged in June, they exchanged views on the possibility of adjusting the YCC and what to watch out for when doing so.
It was a prelude to the Bank of Japan’s decision on Friday to loosen yield controls, theoretically allowing 10-year yields to rise to 1%, above a previously announced cap of 0.5%.
The minutes showed that the debate over the YCC was more intense than Kazuo Ueda indicated at a news conference after the June meeting, and the discrepancy between his remarks at the time and the minutes reinforced a view in the market that it would be difficult for the Bank of Japan to Hint any possibility of changing YCC before acting.
Ultimately, the committee agreed that no adjustments to the YCC were necessary in June given the smoother bond yield curve and improved market functioning.
