Bank of Japan Deputy Governor Kikuo Iwata speaking in parliament yesterday (headlines here
), said the Bank was conducting a study of how it could exit its monetary stimulus
The Bank of Japan has been buying less JGBs this month ... is something afoot. Maybe? Its hard to picture the Bank of Japan is anywhere near an 'exit' ... the Bank still being a long way from hitting its inflation goal. (I'm gonna be on the side that there is pretty much nothing afoot re exit - its still a looong way off).
Reuters have more info on Iwata's comments (bolding is mine):
- "The BOJ is carrying out a simulation based on several assumptions of an exit strategy," Iwata told a financial committee in Japan's upper house, in response to a question from an opposition lawmaker.
- He added the BOJ would refrain from making the details of the simulation public as that would cause market confusion at a time when the central bank is some way off achieving its 2 percent inflation target.
- Izuru Kato, chief economist at Totan Research, said Iwata's comments were a direct response to a question in parliament, not a message about imminent policy intentions
- He noted Iwata has made similar comments in the past."Iwata does not want to discuss an exit because doing so could fuel concerns about a potential loss incurred to the BOJ's expanding balance sheet, which would cost taxpayers' money eventually, and prompt public criticism against the BOJ policy," he added.