The Bank of Japan should stop defending its cap on bond yields

Changing the helmsman halfway through a tricky manoeuvre at sea is a risky prospect. Yet that is what is happening in Japan, where the government will soon propose a successor to Kuroda Haruhiko as the head of the Bank of Japan, just as the central bank prepares to tighten monetary policy for the first time since 2007. In December, amid rising inflation and speculative pressure, the bank raised its cap on ten-year government-bond yields, from 0.25% to 0.5%. The next governor is expected to raise the cap further, or even to abandon the policy, which is known as yield-curve control.