Opinion | The Yield of Japan’s Bad Policies

The Bank of Japan marked Halloween on Tuesday by announcing that Frankenstein’s monster isn’t dead yet. We refer to the Tokyo central bank’s policy in recent years of controlling longer-term interest rates, which Governor Kazuo Ueda this week put on life support without putting it in the grave.

The yield-curve-control policy since 2016 has attempted to manage the yield on 10-year Japanese government bonds (JGBs) to stimulate the economy or inflation or something. Mr. Ueda on Tuesday said that 1% is the maximum “reference point” the BOJ will impose on that yield although the target officially remains zero. This marks a loosening from the last time Mr. Ueda had to scale back on yield controls, in July, when he said 1% would be a cap. At that time, the previous cap had been 0.5%. Before that, it had been 0.25%, and before that 0.1%.