Incoming Bank of Japan Governor Kazuo Ueda said it was appropriate to maintain ultra-loose monetary policy as inflation has yet to sustainably and steadily meet the central bank's 2% target
"It's true there are various side-effects emerging from the stimulus. But the BOJ's current policy is a necessary, appropriate means to achieve 2% inflation."
"There are various possibilities on what YCC could look like in the future," he said, adding that there were side-effects emerging from the policy such as deteriorating market function. In phasing out stimulus, the BOJ would do so by raising interest rates on financial institutions' reserves parked with the central bank rather than selling bonds, Ueda said.
"He's treading a fine line in the sense of trying to find a way to exit without being too disruptive on the dollar/yen direction."
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