Bank of Japan Governor Haruhiko Kuroda stressed that the bank’s latest tweaks on its bond yield control program were not the beginning of an exit of monetary easing, but a way to make it sustainable and run smoothly.
(Bloomberg) — Bank of Japan Governor Haruhiko Kuroda stressed that the bank’s latest tweaks on its bond yield control program were not the beginning of an exit of monetary easing, but a way to make it sustainable and run smoothly.
“This is definitely not a step toward an exit,” Kuroda said in a speech at an event hosted by business lobby Keidanren on Monday.
“The bank will aim to achieve the price stability target in a sustainable and stable manner, accompanied by wage increases, by continuing with monetary easing under the framework of yield curve control.”
His comments came after the policy adjustments last week to double the upper limit of the 10-year bond yield shocked global financial markets and sparked speculation that the BOJ was taking a step toward normalizing policy.
Read: Kuroda Shocker Is Just the Start of BOJ’s Risky Path Toward Exit
Kuroda said on Monday that the move was aimed at improving market functions after the deterioration of the nation’s bond market was observed.
The governor, whose term is set to end in April, said that the bank will maintain its “utmost support” by keeping accommodative financial conditions.
“Labor market conditions in Japan are projected to tighten further and firms’ price- and wage-setting behavior is also likely to change,” Kuroda said.
“We are approaching a critical juncture in breaking out of the prolonged period of low inflation and low growth since the collapse of the bubble economy.”
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