MNI BRIEF:BOJ's Kuroda Says Policy Speculation To Be Corrected

Bank of Japan Governor Haruhiko Kuroda said on Wednesday that he expects market speculation about near-term policy adjustments to be corrected as the BOJ made it clear that it will maintain easy policy amid no sign of the 2% inflation target being achieved and sustained.

“It is natural for market players to have various view on the outlook for monetary policy. The necessity is the BOJ discusses monetary policy openly and clarify them to markets,” Kuroda told reporters after the BOJ maintained its monetary policy settings. (See: MNI BRIEF: BOJ On Hold; Keeps Forward Guidance; Expands Ops)

He added that the sustainability of the yield curve control policy is ensured by December's decision to widen the range around the 10-year yield target to 50bp from 25bp. Kuroda also said that he doesn’t see the BOJ’s huge purchases of Japanese government bonds (JGBs) as a problem. (See MNI BRIEF: BOJ's Kuroda Sees No Need To Widen 0-Yr Range)

The BOJ's monthly JGB purchases posted a record high of JPY17.1 trillion in only nine business days in January in the wake of the bank’s active buying to curb higher bond yields.

The expansion of the fund-providing operation is aimed at forming an appropriate yield curve and at stabilising long-term interest rates at low levels without affecting JGB markets.