Pimco: BOJ may end yield curve control policy this year

The Bank of Japan (BOJ) could end its yield curve control program before the end of the year if rising prices prove more persistent than expected, said Richard Clarida, global economic adviser at Pimco. The Bank of Japan (BOJ) could end its yield curve control program before the end of the year if rising prices prove more stable than expected, according to Pimco, which manages the world’s largest active bond fund. “If data suggests inflation could continue beyond what the BOJ currently forecasts, which we expect, then the BOJ could lift yield curve control late this year or early next year,” global economic adviser Richard Clarida said in a note. Yields on 10-year Japanese government bonds, which are the target of yield curve control, rose to a 10-year high of 0.805 percent yesterday. The yield on the 10-year note fell to 0.79 percent in Asian trading this morning. “At some point, as the economy rebounds, we expect the BOJ to move away from more than a decade of zero or below-zero short-term interest rates. The policy rate could be raised to 0 percent in early 2024,” Clarida said.