BOJ Policy Watched Closely for Possible Exit Strategy

Economy

Tokyo, Jan. 3 (Jiji Press)--The focus of the Bank of Japan's monetary policy management this year is whether the central bank will set out a path toward an exit from its massive easing.

At its monetary policy meeting in mid-December last year, the BOJ decided to tolerate a rise in long-term interest rates to around 0.5 pct, double its previous cap of around 0.25 pct, while keeping its yield curve control framework unchanged. The move is prompting some financial market players to expect that the BOJ will tweak its policy further.

Also, the Japanese government and the BOJ are rumored to be considering overhauling their 2013 joint statement in which they agreed to enhance cooperation to achieve the goal of raising the nation's consumer inflation by 2 pct year on year, amid speculation over who will succeed Haruhiko Kuroda as the country's top central banker. Kuroda's term of office as BOJ governor is set to end in early April.

Financial market players are paying close attention to the fate of the BOJ's 10-year-old unprecedented monetary easing policy.

Kuroda has denied the view held by many market players that the BOJ decision to allow long-term rates to climb to around 0.5 pct is an effective interest rate hike, saying that the step "is intended to conduct monetary easing sustainably and smoothly and is not a step toward an exit (from easing) at all."

[Copyright The Jiji Press, Ltd.]

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