Bank of Japan Sticks to Ultra-Easy Money Policy, Defying Expectations

Central bank maintains zero target for yield on 10-year government bonds, but widens allowable range around it

TOKYO—Bank of Japan Gov. Haruhiko Kuroda said he would let a key interest rate creep up a tenth of a percentage point but otherwise stuck to his ultra-easy monetary policy, defying a global trend toward tightening.

Mr. Kuroda combined a slight nod toward his critics—who say the central bank’s control of interest rates has made the bond market dysfunctional—with a robust defense of his policy of keeping rates extremely low to stimulate inflation.

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