Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
Series Vol. 57 , 05 January 2024
Open
Access | Article
The Impact Study of Yield Curve Control on the Yen Exchange Rate and Japanese Inflation
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Abstract
Yield Curve Control (YCC) is fundamentally an interest rate tool that aims to maintain the yield curve at targeted levels across different maturities. The Bank of Japan (BOJ) initiated zero interest rates and quantitative easing in 2001, followed by qualitative and quantitative monetary easing policies starting in April 2013, and introduced negative interest rates in January 2016. It announced the implementation of Yield Curve Control policy as a policy objective for quantitative and qualitative easing. Amid the current global economic downturn, many Western countries have adopted interest rate hikes to ensure currency stability. However, Japan continues to implement Yield Curve Control policy to address the global economic slowdown. This paper, based on literature review and utilizing Japanese economic data from 2003 to 2022, employs correlation and regression analyses to delve into the impact of Yield Curve Control on the Japanese yen’s exchange rate and inflation. The study reveals that Japan’s Yield Curve Control policy has a certain positive impact on both the yen’s exchange rate and inflation, although this effect is relatively moderate. Therefore, the government should consider enhancing the use of other monetary policy tools and employing a comprehensive approach to influence exchange rates and inflation more effectively.
Keywords
Yield Curve Control, ultra-loose monetary policy, government bond yields, inflation rate, Japanese yen foreign exchange
References
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
- ISBN (Print)
- 978-1-83558-205-3
- ISBN (Online)
- 978-1-83558-206-0
- Published Date
- 05 January 2024
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/57/20230631
- Copyright
- 05 January 2024
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited