BOJ has enough options to exit QE policy

BOJ has enough options to exit QE policy

On Tuesday, BOJ Governor told that some of the options Japan’s major financial institution has when it comes to unwinding its quantitative easing program include increasing interest rates on the excessive reserves lenders hold with the bank.

Speaking in the upper house of parliament, Haruhiko Kuroda told it was too early to tell specifically what the Bank of Japan would do with the government debt on its balance sheet when it has to cease its ultra-easy policy.

However, he added that the Bank of Japan would be able to manage its exit smoothly enough, including cutting the size of its holdings of recently purchased bonds to drive economic growth.

Financial experts tell that his comments mark a definite shift in his public communications.

Other steps, which could help to wind down policy stimulus suggest soaking up liquidity via major bank market operations and also letting bonds on its balance sheet expire. 

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