On Tuesday, the Japanese yen declined sharply after The Bank of Japan re-defined the 1% cap on the 10-year yield as a loose "upper bound" rather than a rigid cap. They also kept its short and long term policy rates at ultra low levels even as core inflation in the country exceeded the stated 2% target for 18 consecutive months. William Pesek tells us what is holding them back from rate normalisation and the tolerance level before currency intervention.

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