Thailand’s SET Index Drops 15pts as BOJ Surprises Markets with Yield Target Band Widening

Thailand’s benchmark stock index lost more than 15 points in the early session on Tuesday, tracking losses in other regional bourses, after the Bank of Japan surprised markets by extending its yield target band, resulting in a stronger yen.

As of 12:07 a.m. (Thai time), the SET index was down 15.77 points, or 0.97%, to 1,602.43.

The Bank of Japan on Tuesday shocked markets with an unexpected widening of the target band for interest rates, prompting a rally in the yen, boosting bond yields and causing a plunge in stocks.

The Nikkei 225 fell 2.51%, leading losses in the region.

The central bank opted to widen the band around its yield cap in order to allow longer-term interest rates to climb more, but it kept its yield target unchanged and said it will sharply accelerate bond purchases, indicating that the move was a fine-tuning of its existing ultra-loose monetary policy.

The BOJ will widen the range around the band from its present plus and minus 0.25 percentage points to plus and minus 0.5 percentage points.