What will the BoJ do next: Target long term yields? - AGFxC

Greg Gibbs, Director at Amplifying Global FX Capital, suggests that the market is now left in a quandary guessing what the BoJ plans next. 

Key Quotes

“If they have been influenced by the critics arguing that they are buying too many JGBs, pushing yields too far below zero and causing market disruption, then the BoJ may implement a variable purchase plan that depends on the levels of yields.  They may scale their buying to buy less when yields are low and more when yields are higher.

This may include some of the elements discussed by Former Fed Governor Bernanke in his recent series of posts on the Brooking Institute website on unconventional tools for easing policy.  In particular they may draw on Bernanke’s ideas on “Targeting long-term interest rates”.”