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Focus shifts away from BOJ a year after drastic policy change

Structural reforms, deregulation seen as more crucial than monetary policy

Bank of Japan Gov. Haruhiko Kuroda speaks to reporters on Sept. 21. (Photo by Wataru Ito)

TOKYO -- In September 2016, the Bank of Japan surprised markets with the introduction of its yield-curve control policy, or YCC. A hugely unconventional policy in modern central banking and a drastic change from its previous policy, the central bank found itself at the center of various debates. A year on, however, hardly anyone is paying attention to the policy -- or to the BOJ, for that matter.

The fact that there is so little discussion of YCC in the market is testament to how well the BOJ has carried it out. The core principle of the policy is to keep the yield on 10-year Japanese government bonds -- long-term interest rates -- near zero. The central bank has managed to do this in the year the policy has been in place; the 10-year JGB yield has more or less hovered between -0.1% and 0.1%.

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