Via the Asahi Shimbun, December 20:
TAKESHI MINAMI, CHIEF ECONOMIST AT NORINCHUKIN RESEARCH INSTITUTE, TOKYO:
"It came as a surprise, but if the decision was delayed into next year, (the BOJ) might not be able to make such a move as the economy is set to worsen.
"The BOJ will keep on monitoring markets when making further moves as needed. But it is unlikely to shift policy automatically just because Governor Haruhiko Kuroda is replaced with someone else in April."
ATUSHI TAKEDA, CHIEF ECONOMIST, ITOCHU ECONOMIC RESEARCH, TOKYO:
"Today's move reflects the BOJ's determination not to alter its yield curve control policy. But the BOJ failed to communicate with markets, as it made no efforts to lay the ground or allow markets to factor in such a move. It came all of sudden so market players must be angry about the decision.
"The BOJ must have been forced into action because the bond market functionality is almost dead.
"The way the BOJ moved abruptly without communication with markets makes BOJ's course of action unpredictable, making it almost impossible to read its mind. Whoever becomes next BOJ Governor must strive to make monetary policy more transparent and predictable."
KHENG SIANG NG, ASIA PACIFIC HEAD OF FIXED INCOME AT STATE STREET GLOBAL ADVISORS, SINGAPORE:
"This signals the beginning of the slow unwind of ultra-low interest rates in Japan.
"The change in YCC range will help reduce the bond market from being artificially held up by central bank bond purchases, and improve secondary trading liquidity."
"As investors further assess the implications...the market may stay volatile for the coming weeks."
NAOMI MUGURUMA, CHIEF FIXED INCOME STRATEGIST, MUFG, TOKYO:
"It was a surprise to most market participants including ourselves. There is a risk that yen might appreciate further because (it is) just before holidays in overseas markets, so there could be further unwinding in yen short position."
"This is one of the earliest steps that the BOJ has decided to take, but I don't think (it) will declare the end of YCC or negative interest rate policy anytime soon."
TAKUMI TSUNODA, SENIOR ECONOMIST, SHINKIN CENTRAL BANK RESEARCH INSTITUTE, TOKYO:
"Since the BOJ is unlikely to be able to continue with its existing policy...it'll be expected there will be another policy change.
"But rather than suddenly abandoning negative interest rates or yield-curve control, it's more likely that the target maturity under the yield-curve control policy will be shortened, for example to seven years from 10 years currently.
"Once there's a new governor, there'll be considerations again. Timing-wise it's likely they'll first be looking to see how sustainable the current economic recovery is."....
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