Traders on Alert for Another BOJ Shock

The Bank of Japan (BOJ) is adjusting its yield curve control tool, a key part of its monetary policy, without prior signals. Governor Prota describes this as a minor tweak rather than a step towards policy normalization. The global rise in bond yields is seen as a factor influencing BOJ's decision. Economists predict that BOJ might raise its yield curve ceiling and inflation forecast, signaling a move towards normalization. Despite differing opinions, there is consensus that BOJ is on the path to policy normalization, with significant steps expected after a new governor takes charge.

What was the main reason given by Governor Prota for the adjustments made to the yield curve control tool?

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How does the distortion of the yield curve relate to the adjustments made by the Bank of Japan?

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What implications does a potential increase in the yield curve ceiling have for the Bank of Japan's monetary policy?

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What are the expectations regarding the Bank of Japan's inflation forecast for 2023?

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What does widespread agreement suggest about the Bank of Japan's direction this year?

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