Asian equities eased on Tuesday, while the yen remained close to a two-week high as traders braced for the Bank of Japan’s policy decision when it is likely to lift its inflation forecasts and ponder tweaks to its bond yield control.
The yen weakened 0.19% to 149.38 per dollar but was not far from the two-week peak of 148.81 it touched on Monday after the Nikkei newspaper reported the BOJ would consider making adjustments to its yield curve control (YCC).
The BOJ sets a target of around 0% for the 10-year yield under YCC. Under criticism that its heavy defence of the cap is causing market distortions and an unwelcome yen fall, it raised its de-facto ceiling for the yield to 1.0% from 0.5% in July.
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