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.