The Bank of Japan is likely to allow bond yields to rise further following this week¡¯s surprise move ¡ª part of a shift to a tighter monetary policy that will benefit financial firms, according to the chief executive of the nation¡¯s second-biggest brokerage.
Daiwa Securities Group CEO Seiji Nakata called the central bank¡¯s doubling of the cap on 10-year bond yields to 0.5% a ¡°modest change in the direction¡± of its policy from a decade of aggressive easing. He expects the BOJ to increase the upper limit to 0.75% next year.
¡°The economic situation has clearly shifted away from deflation,¡± Nakata, 62, said in an interview.
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