Bank of Japan (BoJ) Governor Kazuo Ueda indicated on Monday that the central bank could reduce its monetary easing measures if Japan’s 2% inflation target appears within reach.
Speaking in the Japanese parliament, Ueda emphasized that the BoJ would remain vigilant in adjusting its approach to monetary policy as necessary to ensure price stability. “We will adjust the degree of monetary easing if the 2% inflation target is likely to be achieved,” Ueda said.
In his remarks, the Governor also noted that the BoJ has been gradually tapering its long-term Japanese Government Bond (JGB) holdings, explaining that these assets could not be sold immediately. Additionally, Ueda highlighted the central bank’s paper profits of ¥33 trillion generated from its exchange-traded fund (ETF) holdings during the first half of the fiscal year 2024.
Reaffirming the BoJ’s policy objectives, Ueda underscored that the central bank’s focus remains on achieving stable prices and that financial considerations would not interfere with its commitment to this goal. “Our policy purpose is to achieve stable prices and won‘t be disturbed by consideration for our finances,” he stated.
Ueda also expressed confidence that the BoJ’s approach would maintain trust in Japan’s currency, asserting that appropriate monetary policy aimed at price stability would help preserve public confidence in the yen.
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