On March 29, the deputy governor of the Bank of Japan, Shinichi Uchida, said today that if economic and price conditions justify the gradual withdrawal of stimulus measures, adjusting the central bank‘s YCC policy will “become an option without a doubt”.
He said the BOJ may consider various means or policy measures, including those it has not taken, once the prospect of sustained inflation hitting its target strengthens. If all conditions are met, some change to yield curve control may be necessary. If the situation improves, (adjustment) will undoubtedly be possible.
However, he added that the central bank would consider a mix of data when setting monetary policy, rather than focusing on a specific set of indicators. As the current Japanese inflation has exceeded its target, the market widely speculates that the Bank of Japan may adjust or terminate the YCC after the new Governor Kazuo Ueda succeeds the current Governor Haruhiko Kuroda.
