Bank of Japan may further loosen cap on long-term bond yields, report says

The Bank of Japan on Tuesday could move to further loosen its cap on long-term bond yields, Nikkei reported — a move that could rattle global financial markets.

The 1% cap was established in late July, replacing a previous cap of 0.5%. Under YCC, the BOJ is committed to unlimited fixed-rate buying operations to keep yields below the cap. The U.S. dollar was down 0.2% versus the Japanese currency USDJPY, -0.40% near 149.20 yen. The dollar has traded above 150 yen this month, prompting talk of potential intervention by Japanese authorities. Analysts have said continued yen weakness could prompt the BOJ to further loosen the cap on long-term yields.

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Oil slips back below $90 a barrel as supply worries from Israel-Hamas war easeWilliam Watts is MarketWatch markets editor. In addition to managing markets coverage, he writes about stocks, bonds, currencies and commodities, including oil. He also writes about global macro issues and trading strategies. During his time at MarketWatch, Watts has served in key roles in the Frankfurt, London, New York and Washington, D.C.
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