Bank of Japan (BoJ) Governor Kazuo Ueda said on Thursday that they could tweak the Yield Curve Control (YCC) strategy if the balance between the benefit and the cost of the policy were to shift, as reported by Reuters.

Additional takeaways

"Shortening the duration of bond yield BoJ targets to 5-year zone from current 10-year would be among options if we were to tweak YCC in the future."

"It is possible to keep 5-year bond yield stable and low even by targeting 10-year yield, as long as the shape of yield curve is an upward slope."

"BoJ must avoid tightening monetary policy prematurely."

"Japan's consumer inflation likely to slow ahead but if this projection proves wrong, we will act swiftly."

"BoJ will conduct various surveys, hearings and workshops inviting academics in review of past monetary policy moves."

"BoJ should stick to its 2% inflation target."

Market reaction

USD/JPY edged lower with the initial reaction to these remarks and was last seen losing 0.1% on the day at 139.32.