Stability is "extremely desirable" in the case of Japanese bond market, Bank of Japan Governor Haruhiko Kuroda said Friday during a speech at an International Conference on the 'Future of Asia'
Commenting on the recent spike in Japanese government bond yield, he said the central bank will stem volatility through flexible market operations. He also vowed to strengthen communication with the markets.
While declining to comment on daily movements in Japanese stock and bond markets, Kuroda said there is no specific targets for stock prices or foreign exchange rates.
Massive stimulus measures announced by the Bank of Japan in April "will lead Japan's economy to overcome the deflation that has lasted for nearly 15 years, and reinvigorate the economy," he said at the conference, according to a text of the speech published on the central bank website.
The BoJ on Thursday injected JPY 2 trillion funds into the system to stabilize Japan's long-term interest rates. The 10-year JGB yield jumped to its highest in level in more than one year early Thursday after Federal Reserve Chairman Ben Bernanke's remarks signaled a possible reduction in US monetary stimulus in the coming months.
Bernanke's comments sparked concerns that the Fed may scale back its massive bond purchases in the upcoming meetings, if the US economy improves.
BoJ retained its ultra-loose monetary policy after its regular monetary policy meeting on Wednesday. In April, the central bank unveiled a massive stimulus program, pledging to double its monetary base and purchase of JGBs in two years.
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