MNI BRIEF: BOJ Shift Not Rate Hike, Doesn't Mean Exit - Kuroda

Bank of Japan Governor Haruhiko Kuroda said the decision to lift the cap on the 10-year bond yield to 50bp is neither a rate hike nor an exit from easy policy but rather a way to to enhance the transmission of monetary policy.

“Today’s decisions will increase the sustainability of easy policy, which will contribute to achieving a 2% price target,” Kuroda told reporters.

He added that easy policy since 2013 had lowered real interest rates and banks’ lending rates. As a result, Japan’s economy has moved out from deflation.

“The positive impact of easy policy exceeded those of side-effects,” he said. “It is premature to discuss an exit strategy of easy policy,” Kuroda said.

He added that if the 2% price target comes into sight, the BOJ will communicate with market participants with regard to an exit strategy after discussing it with the board.