| TOKYO, Sept 9
TOKYO, Sept 9 The Bank of Japan is studying
several options to steepen the bond yield curve that might be
debated at this month's rate review as part of measures to
fine-tune its massive stimulus programme, say sources familiar
with its thinking.
They are brain-storming ways to cut short- to medium-term
bond yields, which affect corporate borrowing costs the most,
while pushing up super-long yields from undesirably low levels,
the sources said on condition of anonymity.
Among ideas being floated is to make the BOJ's bond buying
more flexible and offering markets clearer guidance on the
future path of policy, the sources said.
"With negative rates now added to the policy framework, the
BOJ can combine its tools in numerous variations," said one of
the sources familiar with its thinking. "Offering forward
guidance could also be very effective."
The BOJ has failed to achieve its 2 percent inflation target
despite three years of money printing under a massive asset
buying programme, dubbed "quantitative and qualitative easing"
Japan's yield curve flattened markedly after the BOJ in
January added negative rates to QQE, surprising policymakers who
did not expect super-long yields to fall so much in response to
a step aimed at reducing short-term rates.
(Additional reporting by Yoshifumi Takemoto and Sumio Ito;
Editing by Shri Navaratnam)