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Although the Bank of Japan (BOJ) is likely to maintain its monetary policy setting this Thursday, the central bank could reassess the Japanese economic outlook, in light of the covid developments in the country, per Reuters.

Key takeaways

“The BOJ already seems to be allowing for a wider trading range for JGBs.“

“The yield on ten-year JGBs spiked to 0.056% Monday after a Jiji press report late Friday that the BOJ was reassessing its yield curve control policy, especially for the long end, citing the possibility of a wider +/-20 bps trading range (something last seen in July 2018).“

“There is already some speculation that changes may be likely then, alongside a reassessment of its outlook which remains tied to progress in the fight to contain the current coronavirus resurgence.”

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