TOKYO (Reuters) -The Bank of Japan will review the side-effects of its monetary easing at next week's policy meetings and may take additional steps to correct distortions in the yield curve, the Yomiuri newspaper reported on Thursday.
The BOJ stunned markets last month by widening the band around its 10-year bond yield target, a move that allowed the yield to rise by up to 0.50% from the previous cap of 0.25%.
But the move has failed to address distortions caused in the bond market from the BOJ's massive bond buying, heightening market speculation, analysts say. The central bank will take additional steps as early as its policy meeting next week.
At next week's meeting, the BOJ's nine-member board will debate the side-effects of its yield curve control (YCC) policy and bond market moves since the December decision, the Yomiuri said.
It will also scrutinise whether the BOJ can correct market distortions through adjustments in the amount of bonds it buys, and will take additional policy tweaks if needed, the paper said without citing sources.
The dollar extended its decline against the yen after the report, briefly falling 0.42% to 131.95.