BOJ’s Ueda: Will debate exit from easy policy when price goal achievement nears

By Leika Kihara

TOKYO (Reuters) – Bank of Japan Governor Kazuo Ueda said on Wednesday the central bank will debate an exit strategy from ultra-loose monetary policy and communicate it to the public once stable, sustained achievement of its inflation target approaches.

But he told parliament that it was too early to discuss an exit from the BOJ’s massive stimulus programme as it will take more time to stably and sustainably hit its 2% inflation target.

While it was also premature to talk about specific ways to unload the BOJ’s huge holdings of exchange-traded funds (ETF), the central bank will likely sell the assets at market price if it were to do so in the future, Ueda said.

Under a policy dubbed yield curve control, the BOJ sets a short-term interest rate target of -0.1% and caps the 10-year bond yield around zero. It also pledges to buy ETFs in huge amounts in times of market turbulence.

“The BOJ’s ETF purchases have helped underpin consumption and capital expenditure” by preventing market instability from hurting household and corporate confidence, Ueda said.

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