Exit from easing should be very gradual: BOJ Kuroda

March 7, 2018

Tokyo- Bank of Japan Governor Haruhiko Kuroda said Tuesday that the process of the central bank's future exit from its ultraeasy monetary policy should be extremely gradual.

"We'll pursue (the exit) very gradually and in a most appropriate way so as not to cause a major impact on financial markets," Kuroda, who has been nominated by the government for another five-year term as the top Japanese central banker, said in a confirmation hearing at the Rules and Administration Committee of the House of Councillors, the upper chamber of the Diet, the country's parliament.

At the same time, Kuroda said it is "premature" to discuss specifics about an exit strategy, emphasizing that the BOJ will tenaciously continue monetary easing until its 2 pct inflation target is met.

He said it is "extremely regrettable" that the target has not been achieved during his current five-year term as BOJ governor, which is set to expire on April 8. "I'll make all-out efforts to attain the goal (if reappointed)," Kuroda said.

In a hearing at the Rules and Administration Committee of the House of Representatives, the lower chamber, on Friday, Kuroda said that consumer price growth will likely reach 2 pct around fiscal 2019 and there is no doubt that the BOJ would be discussing around the same time an exit from its current policy.

On this remark, Kuroda said in Tuesday's hearing, "I didn't mean that there will be an exit from the ultraeasy policy around fiscal 2019."

Kuroda also pledged that the BOJ will continue working with the government to bail the country out of deflation.

The BOJ will head steadily toward achieving its 2 pct inflation goal, he said. "We'll cooperate with the government and support the efforts to overcome deflation."

The Upper House steering committee will hold hearings with Waseda University Prof. Masazumi Wakatabe and BOJ Executive Director Masayoshi Amamiya, both the candidates for the central bank's two deputy governors, on Wednesday.

The steering committee of the Lower House conducted hearings with the two on Monday.

Both Diet chambers are expected to approve the plan to retain Kuroda as BOJ governor and the nominations of Wakatabe and Amamiya as his deputies at plenary meetings by March 19, when the terms of the incumbent deputy governors--Kikuo Iwata and Hiroshi Nakaso--are set to expire.

The top three BOJ officials will be formally appointed by the cabinet after the parliamentary approval. Jiji Press