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TOKYO, Jan 16 (Reuters) – The Bank of Japan (BOJ) is under pressure to change its interest rate policy as soon as Wednesday, after the central bank’s attempt to buy itself breathing room backfired, emboldening bond investors to test its resolve.

Unlike other central banks that have been aggressively raising rates to battle inflation, the BOJ continues its decades-long attempt to stoke price rises in the world’s third-biggest economy, even as inflation has exceeded the bank’s target.

Full coverage: REUTERS

Household Wealth Optimism Collapses, Global Survey Shows

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Jan 16 (Reuters) – Barely two in five people believe their families will be better off in the future, according to a regular global survey that also identified growing levels of distrust in institutions among low-income households.

The Edelman Trust Barometer, which for over two decades has polled the attitudes of thousands of people, found that economic pessimism was at its highest in some of the world’s top economies such as the United States, Britain, Germany and Japan.

Full coverage: REUTERS

Asian Shares Rise, Yen Climbs As BOJ Battles Bond Bears

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SYDNEY, Jan 16 (Reuters) – Asian shares firmed on Monday as optimism about China’s reopening offset concerns the Bank of Japan (BOJ) might temper its super-sized stimulus policy at a pivotal meeting this week, while a holiday in U.S. markets made for thin trading.

The yen climbed to its highest since May after rumours swirled the BOJ might hold an emergency meeting on Monday as it struggles to defend its new yield ceiling in the face of massive selling.

Full coverage: REUTERS

Explainer: How Does Japan’s Yield Curve Control Work?

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TOKYO, Jan 16 (Reuters) – The Bank of Japan’s yield curve control (YCC) is under fierce market attack, as investors test the bank’s commitment to capping bond yields with inflation above the BOJ’s target.

The BOJ’s ultra-easy policy targets some short-term interest rates at -0.1% and the 10-year government bond yield at 0.5% above or below zero, in an effort to sustainably achieve 2% inflation.

Here is how Japan’s YCC works and its potential pitfalls.

Full coverage: REUTERS

Morning Bid: Let It Go

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A look at the day ahead in European and global markets from Anshuman Daga.

The land of rising yields is the No. 1 focus of investors on Monday, as Japan’s central bank may again let its bond-market peg go higher.

The yen surged to its highest in more than seven months as traders ramped up bets that the Bank of Japan may make further tweaks to its yield control policy (YCC) at its meeting on Wednesday.

Full coverage: REUTERS