Economic news

BOJ could target more flexible policy after Kuroda’s departure -ex-board member Kiuchi

2022.07.28 18:22

BOJ could target more flexible policy after Kuroda's departure -ex-board member Kiuchi
FILE PHOTO: A man wearing a protective mask walks past the headquarters of the Bank of Japan amid the coronavirus disease (COVID-19) outbreak in Tokyo, Japan, May 22, 2020.REUTERS/Kim Kyung-Hoon

By Divya Chowdhury

MUMBAI (Reuters) – The Bank of Japan could target a more flexible monetary policy after the departure of dovish Governor Haruhiko Kuroda next April, former BOJ policy board member Takahide Kiuchi said on Thursday.

The BOJ may shift its target range of for its Japanese government bond purchases from 10 years to five years, and eventually two years, under its yield curve control policy, Kiuchi told the Reuters Global Markets Forum.

“It’s not likely to happen under Mr. Kuroda’s era. I think that Mr. Kuroda (will) stick to his strong belief that aggressive use of monetary of policy can work and can eventually achieve that (2% inflation) goal,” he said.

As part of its efforts to fire up inflation to its 2% target, the BOJ now guides short-term rates towards -0.1% and caps the 10-year bond yield around zero.

A more flexible monetary policy would provide stability to the financial markets and the economy, said Kiuchi, who is now executive economist at the Nomura Research Institute.

However, taking interest rate deeper into negative territory could be prioritised under Kuroda’s leadership, Kiuchi said. As global risks heighten, the BOJ could miss an opportunity to normalise policy.

Kiuchi said the BOJ will not change its 2% inflation goal even though it seemed “too high and unachievable”, but could consider changing the “status” of its inflation target from a short-term goal to a longer-term one, paving the way for further normalisation steps.

“Change of status of 2% inflation goal, and then next step could be a cancellation of negative interest rates, followed by the cancellation of the yield curve control,” he said.

Kiuchi said he expected the BOJ to increase its short-term interest rate by 2024-2025.

(Join Global Markets Forum, a chat room hosted on Refinitiv Messenger: https://refini.tv/33uoFoQ)

Source

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 98,141.29 3.91%
ethereum
Ethereum (ETH) $ 3,489.20 2.11%
tether
Tether (USDT) $ 0.998966 0.01%
xrp
XRP (XRP) $ 2.30 1.80%
bnb
BNB (BNB) $ 703.27 1.41%
solana
Solana (SOL) $ 198.87 3.92%
dogecoin
Dogecoin (DOGE) $ 0.33335 3.07%
usd-coin
USDC (USDC) $ 0.999576 0.09%
staked-ether
Lido Staked Ether (STETH) $ 3,484.08 2.19%
cardano
Cardano (ADA) $ 0.924916 1.33%
tron
TRON (TRX) $ 0.256558 1.59%
avalanche-2
Avalanche (AVAX) $ 41.26 6.04%
chainlink
Chainlink (LINK) $ 24.83 2.49%
the-open-network
Toncoin (TON) $ 5.85 3.74%
wrapped-steth
Wrapped stETH (WSTETH) $ 4,133.97 2.09%
shiba-inu
Shiba Inu (SHIB) $ 0.000023 3.30%
sui
Sui (SUI) $ 4.61 1.27%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 97,847.22 3.83%
hedera-hashgraph
Hedera (HBAR) $ 0.311927 5.12%
stellar
Stellar (XLM) $ 0.389626 4.18%
polkadot
Polkadot (DOT) $ 7.46 2.20%
weth
WETH (WETH) $ 3,490.45 2.14%
hyperliquid
Hyperliquid (HYPE) $ 29.93 2.28%
bitcoin-cash
Bitcoin Cash (BCH) $ 465.32 1.07%
leo-token
LEO Token (LEO) $ 9.53 1.34%
uniswap
Uniswap (UNI) $ 14.18 0.54%
litecoin
Litecoin (LTC) $ 108.44 1.76%
pepe
Pepe (PEPE) $ 0.000019 3.24%
bitget-token
Bitget Token (BGB) $ 5.19 15.60%
near
NEAR Protocol (NEAR) $ 5.57 2.11%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,682.54 2.13%
ethena-usde
Ethena USDe (USDE) $ 0.998927 0.03%
aave
Aave (AAVE) $ 372.76 0.88%
aptos
Aptos (APT) $ 9.82 2.65%
internet-computer
Internet Computer (ICP) $ 11.37 5.57%
usds
USDS (USDS) $ 0.999624 0.32%
crypto-com-chain
Cronos (CRO) $ 0.162273 0.37%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.520615 2.30%
vechain
VeChain (VET) $ 0.052168 7.75%
ethereum-classic
Ethereum Classic (ETC) $ 27.62 1.06%
mantle
Mantle (MNT) $ 1.23 2.67%
render-token
Render (RENDER) $ 7.78 0.04%
bittensor
Bittensor (TAO) $ 504.47 1.79%
monero
Monero (XMR) $ 196.31 4.87%
mantra-dao
MANTRA (OM) $ 3.80 0.31%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.38 1.16%
whitebit
WhiteBIT Coin (WBT) $ 24.84 1.81%
arbitrum
Arbitrum (ARB) $ 0.808398 0.68%
dai
Dai (DAI) $ 0.999782 0.02%
filecoin
Filecoin (FIL) $ 5.39 4.13%