TOKYO: Bank of Japan (BOJ) Governor Haruhiko Kuroda said on Wednesday the central bank will consider publicising calculations on how a future withdrawal of massive monetary stimulus could affect its financial health.
The remark was the first time that Kuroda, who until now had shrugged off as premature any debate of an exit strategy for the BOJ’s radical stimulus programme, signalled the chance of offering such information to the public.
“It is very important to explain in easy-to-understand terms how monetary policy could affect the BOJ’s financial health,” Kuroda told parliament on Wednesday.
“We will consider it as a future possibility,” he said, when asked about the chance of releasing calculations on the effect a withdrawing of stimulus could have on the BOJ’s balance sheet.
Kuroda said he was not currently thinking about any specific ways to change the BOJ’s present policy mix, stressing that yield curve control remained the main focus of monetary policy.
Kuroda said that the amount of government debt purchases and the monetary base level included in its policy statement were merely guidelines.
“In theory, it is possible to combine the different elements of monetary policy in several ways,” Kuroda said. “However, I’m not thinking about changing the policy mix right now.”
At its most recent meeting on April 26-27, the BOJ maintained its short-term interest rate target at minus 0.1 per cent and a pledge to guide 10-year government bond yields around zero per cent.
It also maintained a loose pledge at the meeting to buy government bonds at a rate that would increase its holdings by 80 trillion yen a year.
Since then, the BOJ has said it will reduce its monthly government debt purchases in May, showing the central bank is stepping back from the 80 trillion yen (US$704 billion) target.
In a speech delivered later in the day, Kuroda repeated that the amount of government bonds the BOJ buys could fluctuate from time to time depending on the quantity needed to achieve yield targets.
“Such changes won’t have any implications on the BOJ’s future policy stance,” he said.
Prior to the meeting, some economists speculated that the BOJ could remove the 80 trillion yen figure from its statements because it was no longer the main lever of its policies. -- REUTERS