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Bank of Japan: BOJ’s Kuroda dismisses near-term exit from easy policy

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Bank of Japan: BOJ’s Kuroda dismisses near-term exit from easy policy

Tokyo: Bank of Japan (BOJ) Governor Haruhiko Kuroda on Monday brushed aside the chance of a near-term exit from ultra-loose monetary policy, although markets and policymakers are signaling an increasing focus on what comes after Kuroda’s tenure ends.

Investors have continued to push up Japanese government bond yields on expectations the BOJ will phase out its yield control under a new governor when Kuroda’s second five-year term comes to a close in April of next year.

The shift in attention towards a post-Kuroda era was also evident in comments by Prime Minister Fumio Kishida on Monday that a decision on whether to revise Japan’s decade-old blueprint for beating deflation will be made after a new BOJ governor is appointed.

“It’s something for after the new BOJ governor is decided,” Kishida said in a seminar, referring to possible changes the government might seek to its joint statement with the BOJ that commits the central bank to hitting a 2% inflation target at the earliest date possible.

Japan’s central bank shocked markets last week with a surprise widening of the allowance band around its 10-year Japanese government bond target, a move that aimed at easing some of the cost of prolonged stimulus.

Kuroda said on Monday that last week’s decision was intended to enhance the effect of its ultra-easy policy, rather than a first step towards withdrawing its massive stimulus programme.

“This is definitely not a step toward an exit. The Bank will aim to achieve the price target in a sustainable and stable manner, accompanied by wage increases, by continuing with monetary easing under yield curve control,” Kuroda said in a speech delivered to the business lobby Keidanren.

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