© Reuters. FILE PHOTO: A man walks past the headquarters of Bank of Japan in Tokyo, Japan, January 17, 2023. REUTERS/Issei Kato/File Photo
By Leika Kihara and Takaya Yamaguchi
TOKYO (Reuters) – The Bank of Japan may raise a cap set around its 10-year bond yield target to 0.75% or double it to 1.0% by around mid-year if inflation overshoots its expectations, Columbia University academic Takatoshi Ito said on Thursday.
Depending on inflation and wage developments, the central bank may also abandon negative rates by raising its short-term interest rate target from -0.1% by the end of this year, Ito told Reuters in an interview.
Ito, who is a close associate of BOJ Governor Haruhiko Kuroda’s, is considered by some analysts as a candidate to join the central bank’s leadership when the terms of Kuroda and his two deputies end in the coming months. Kuroda’s term is up in April, while those of his two deputies expire in March.
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