Kuroda ‘sure’ BoJ can withdraw massive stimulus
TOKYO: Bank of Japan Governor some time away. Haruhiko Kuroda said he was “quite But many market participants sure” the central bank could smoothly expect the BoJ’s next move to be a exit from its massive monetary withdrawal, not an expansion, of stimulus when the appropriate time to stimulus as the economy shows signs do so came. of strength, thanks to a rebound in
But he also said the BoJ “always” global demand. had room to expand monetary Some analysts worry about the stimulus to achieve its 2 per cent sustainability of the BoJ’s stimulus inflation target, indicating that wages programme, with the central bank and prices had been slow to respond having already gobbled up 40 per cent to improvements in the economy. of the Japanese government bond
The remarks suggest the BoJ is in market. no rush to swing monetary policy in Kuroda dismissed such concerns, either direction, particularly towards saying the BoJ still has 60 per cent of cutting back on stimulus with the the market left to buy from. “I really economic recovery still fragile. don’t think there is any constraint to
“There may be some challenging Kuroda added, stressing that the BoJ our yield curve control,” he said. issues, but I’m quite sure the BoJ has was nowhere near an exit from its He also shrugged off concerns that enough tools” to manage an exit from massive stimulus programme with expected interest rate hikes by the its stimulus programme, Kuroda told inflation distant from its 2 per cent Fed could disrupt global markets and a seminar hosted by the Wall Street target. cool growth. “I’m not very concerned Journal in Tokyo on Tuesday. Under a new framework dubbed about the normalisation process the
For whenever the BoJ decides to yield curve control (YCC) that was put Fed is implementing... as it reflects the withdraw stimulus, Kuroda said there in place last year, the BoJ caps longstrength of the US economy,” Kuroda may be lessons to learnsaid.fromhowtheterminterestratesaroundzeroper US Federal Reserve normalises its cent via aggressive asset purchases. He added that the Fed’s policy ultra-loose monetary policy. With inflation stubbornly stuck would not have a direct impact on
“But the United States is the United around zero per cent, BoJ officials the BoJ’s monetary policy, which is States, Japan is Japan. have stressed that any exit from focused on the mandate of achieving
At this stage, we’re not massive monetary support would be 2 per cent inflation. exiting,”