In his inaugural press conference as Bank of Japan governor on April 10, the 71-year old academic Kazuo Ueda had to choose his words carefully. With Japanese consumer price inflation at a multi-decade high, and the gap between BoJ and other central bank policy now yawning, the arrival of a new helmsman would allow bond investors to let their imaginations run freely.

They had been speculating that the BoJ would normalise its policy for some months. But their narrower, and more immediate concern, was whether, under new leadership, the BoJ would quickly abandon the yield curve control (YCC) regime it has deployed since 2016 to hold rates on the benchmark 10-year JGB at around zero per cent.   

Based on the Ueda press conference, the ostensible answer appeared to be “no”. But, ahead of his first monetary policy meeting as governor, on April 27-28, some prominent economists wonder if this is a misreading. A number of them now argue that YCC could be scrapped later this month, or in an ad hoc announcement in mid-May — and will certainly be gone by June.