BoJ surprises, adjustment of curve control and flexible interpretation of 0.5% as a reference point effectively widen the band to +/-100 bps. They will take action to keep yields between 0.5% and 1%. 

The decision is positive for JGB yields. The resulting narrowing of UST/JGB spreads should bolster the appeal of the Yen and diminish pressure to intervene in Yen. 

The forecast of headline inflation was revised up for FY23 but down for FY24 and unchanged for FY25. 

For Governor Ueda, today’s move is not a step towards normalisation of policy and stable inflation with wage growth is not yet in sight.