Not for the first time in the past 20 years, the challenges of global monetary policy making have been laid bare by the Bank of Japan. By opting not to tighten policy on Tuesday, as it had looked like it might, the BOJ highlighted how difficult it is for central banks to unwind extraordinary, crisis-era policy before the economy turns, no matter how much they may want to. It was another reminder that when it comes to extraordinary easing measures like QE and zero or negative interest rates, as The Eagles put it in ‘Hotel California’: “You can check out any time you like, but you can never leave”. For investors, any signal, no matter how small, that policymakers are preparing to reverse crisis-era stimulus can have an outsized impact. Recent hints from the BOJ along these lines helped lift the 10-year Japanese yield to its highest level in a year and a half as of earlier on Tuesday. In an ideal world, central bankers would be unwinding much faster. Low and negative rates hurt banks, ...

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