The yen’s muted response suggests markets saw little new here beyond confirmation of the BoJ’s existing approach. For Japanese government bonds, Ueda’s message cuts two ways: he is not offering a backstop at any particular yield level, yet he is signalling the bank will act if the selloff becomes disorderly. Super-long JGBs, the most sensitive part of the curve, are where any test of that commitment would show up first. His argument that falling behind on rates would push yields higher strengthens the hawkish framing ahead of 30 October. Global bond investors will watch closely, given Japan’s role in global yields and capital flows.-Ueda is telling bond markets that the best protection against a disorderly selloff is a BoJ that keeps raising rates on time, not a promise to step in at a set level.Summary:BoJ Governor Kazuo Ueda said there is no change to the bank’s basic stance on tapering its bond purchasesHe said it would be inappropriate to say in advance when the BoJ might conduct emergency bond market operationsAny decision would weigh market conditions comprehensively, such as a rapid rise in long-term rates or signs of destabilising market functionHe expects long-term rates to rise steadily in line with any increases in the policy rateHe warned that failing to adjust rates appropriately could push long-term yields higher on inflation overshoot fearsHe said financial conditions remain accommodative; the yen barely movedBank of Japan Governor Kazuo Ueda said the central bank’s basic approach to reducing its bond purchases is unchanged, and declined to say in advance when it might step into the government bond market with emergency operations.Speaking in the same appearance in which he stressed the importance of anchoring underlying inflation around 2%, Ueda said the BoJ would look comprehensively at market conditions before deciding whether to intervene. He pointed to two considerations in particular: whether long-term interest rates are rising at a rapid pace, and whether bond market functioning is showing signs of instability.Ueda also set out how he expects short and long-term rates to interact as policy tightens. If the BoJ raises its short-term policy rate, he said, long-term rates are likely to rise steadily in line with those steps. But if the policy rate is not adjusted appropriately, he warned, market concerns about the risk of inflation overshooting could push long-term yields higher.In effect, Ueda argued that well-calibrated rate increases are a stabilising force for the Japanese government bond market rather than a threat to it. By conducting policy appropriately to achieve its 2% inflation goal, he said, the BoJ can help stabilise JGBs. He added that financial conditions remain accommodative, a reminder that policy is still supportive of growth even after the bank’s recent hikes.The remarks address a tension that has run through the BoJ’s exit from years of ultra-loose policy. The bank has been gradually scaling back its bond buying while raising rates, leaving investors alert to the risk of disorderly moves in long-term yields. By declining to set a trigger for emergency buying, Ueda keeps the bank’s options open while signalling that intervention would be reserved for genuinely disorderly conditions rather than a steady repricing.The comments also reinforce the hawkish tone of his earlier remarks, framing further rate increases as consistent with market stability. The BoJ’s policy rate stands at 1.25%, with the next decision due on 30 October.The yen was little changed as Ueda spoke, suggesting the bond market comments largely confirmed existing expectations. This article was written by Eamonn Sheridan at investinglive.com.