By Leika Kihara
TOKYO (Reuters) -Many Bank of Japan board members agreed the country’s long-term interest rates should be set by markets, with some saying the central bank should at some point slow the pace of bond buying, minutes of their March policy meeting showed on Thursday.
At the March meeting, the BOJ ended eight years of negative interest rates and its bond yield control in a historical shift away from its prolonged radical stimulus programme.
The central bank also decided to continue buying government bonds at broadly the same amount as before for the time being, and step in with bigger purchases in the event of a rapid spike in yields.
“With respect to yield curve control, many members expressed the view that it was appropriate for the Bank to change its framework. These members shared the view that long-term interest rates would be determined by financial markets in principle,” the minutes showed.
One member said it was appropriate for the BOJ to take time in adjusting the pace of its Japanese government bond (JGB) purchases to avoid rapid fluctuations, according to the minutes.
“Some members expressed the view that it was desirable for the Bank to reduce the amount of JGB purchases at some point in the future, and also reduce the amount outstanding of its JGB holdings through redemptions of JGBs,” the minutes showed.
(Reporting by Leika Kihara; Editing by Jacqueline Wong and Shri Navaratnam)
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