Yen weakens despite BOJ's policy tweak allowing higher yields

Japan's central bank signals it is not yet ready for drastic jump in rates

The Bank of Japan has expanded its target band for the 10-year yield, but market watchers think its exit from ultralow rates remains far away. (Photo by Konosuke Urata)

TAKAHISA TAMURA, AKIRA INUJIMA and DAICHI MISHIMA, Nikkei staff writer

August 3, 2023 02:09 JST

TOKYO -- Though Japanese bond yields are rising following last week's policy adjustment by the Bank of Japan, speculation that the bank does not plan to end its monetary easing has pushed the yen lower.

The yield on new 10-year Japanese government bonds rose as far as 0.625% at one point on Wednesday, its highest since April 2014. The benchmark has been trending upward since the Bank of Japan on Friday decided to take a more flexible approach to its yield curve control policy, allowing the 10-year yield to raise up to 1%.