It will now be a question of whether this is really where the BOJ draws the line or if they will eventually abandon their entire yield curve control policy. Kuroda might have said that they are not thinking about it yesterday but as soon as you blindside markets in the way that he did yesterday, there's not much trust left lingering now.
The wider band for the 10-year JGB yields target makes sense from a market functioning perspective but if they wanted to address that, they could've done so much earlier and communicated it better surely. That will at least help the central bank retain some credibility in their commitment to the 2% inflation target.
Instead, after the fiasco yesterday, markets are not waiting for the BOJ anymore. 10-year yen swaps are on approach to 0.80% and the pressure will continue to mount for the BOJ now to defend their new red line.
