Key moments in BOJ’s monetary policy

(Reuters) – Japan’s decades of ultra-low interest rates may reach a turning point as the central bank debates the fate of its yield control policy, which is creaking under intense pressure as markets repeatedly break a limit set less than a month ago.

Here is a timeline of key moments in the Bank of Japan’s battle with decades-long deflation and low inflation.


February – BOJ introduces zero interest rate policy.


August – BOJ raises short-term target to 0.25%, a move criticised as premature as Japan suffers a domestic banking crisis.


March – BOJ adopts quantitative easing (QE), shifts policy target from interest rates to pace of money printing.


March – BOJ exits QE, shifts back to interest rate target.

July – BOJ raises short-term rates to 0.25%.


February – BOJ raises short-term rates to 0.5% from 0.25%.


October – BOJ cuts short-term rates to 0.3% from 0.5% to fend off economic shocks from the collapse of Lehman Brothers.

December – BOJ cuts short-term rates to 0.1% from 0.3%.


October – BOJ cuts short-term rates to 0-0.1%, starts buying risky assets like exchange-traded funds (ETF) as part of a newly introduced asset-buying programme.


January – BOJ adopts 2% inflation target, signs agreement with government pledging to meet the target “at the earliest date possible.”

April – BOJ Governor Haruhiko Kuroda adopts new asset-buying scheme dubbed “quantitative and qualitative easing” (QQE), commits to achieving 2% inflation in roughly two years.


October – BOJ expands QQE, increases purchases of government bonds, ETFs.


January – BOJ adds negative interest rate policy, and applies a 0.1% charge to a small pool of excess reserves financial institutions park with the central bank.

July – BOJ eases monetary policy, ramps up ETF buying

September – BOJ adopts yield curve control (YCC), shifts policy target to interest rates from pace of money printing and introduces 10-year bond yield target of around 0%.


April – Governor Kuroda re-appointed for a second term.

July – BOJ clarifies it will allow the 10-year yield to move 10 basis points either side of its 0% target.


March – BOJ conducts “comprehensive assessment” of YCC to address its side-effects. It decides to taper ETF buying, widen the 10-year yield band to 25 basis points up and down the 0% target, and adopts new market operation that allows it to buy unlimited amount of 10-year bonds at a fixed rate.


May – BOJ begins to offer buying unlimited amount of 10-year bonds at a fixed rate on a daily basis, as long-term interest rates approached its 0.25% cap more frequently than before

December – BOJ widens 10-year yield band to 50 basis points up and down the 0% target, a move aimed at easing some of the cost of prolonged stimulus.


January – BOJ offers 1 trillion yen ($7.8 billion) worth of two-year funds at 0% interest to financial institutions against collateral, a move seemed as part of efforts to keep short-term government bond yields from rising too much.

($1 = 128.1700 yen)

(Reporting by Leika Kihara; Editing by Shri Navaratnam)