- As the central bank defies speculators, potential costs mount
In December the Bank of Japan (boj) gave speculators an opening. By lifting its cap on ten-year government bond yields from 0.25% to 0.5%, the central bank raised the prospect that it would abandon its “yield-curve-control" policy entirely. Since then, officials have been put to the test by increasingly uncooperative bond markets. The boj has been forced to make enormous bond purchases in an attempt to drive down the yield, buying ¥9.5trn yen ($72bn) on January 12th and 13th alone.