Traders on Alert for Another BOJ Shock

The Bank of Japan (BOJ) is adjusting its yield curve control tool, a key part of its monetary policy, without prior signals. Governor Prota describes this as a minor tweak rather than a step towards policy normalization. The global rise in bond yields is seen as a factor influencing BOJ's decision. Economists predict that BOJ might raise its yield curve ceiling and inflation forecast, signaling a move towards normalization. Despite differing opinions, there is consensus that BOJ is on the path to policy normalization, with significant steps expected after a new governor takes charge.

What was the main reason given by Governor Prota for the adjustments made to the yield curve control tool?

How does the distortion of the yield curve relate to the adjustments made by the Bank of Japan?

What implications does a potential increase in the yield curve ceiling have for the Bank of Japan's monetary policy?

What are the expectations regarding the Bank of Japan's inflation forecast for 2023?

What does widespread agreement suggest about the Bank of Japan's direction this year?