Bank of Japan (BOJ) Governor Kuroda spoke on Saturday.
A report of his speech has Kuroda ‘proudly’ expounding on the Bank of Japan (BOJ)’s “quantitative and qualitative easing (QQE)” program:
“The ‘QQE’ has been producing the anticipated results and Japan’s economy has been following the path toward achieving the 2% price stability target, as expected,” Mr. Kuroda proudly told the audience gathered at the University of Tokyo, where he graduated from in 1967.
Kuroda was less certain in other comments, though:
- “Experiences of, for instance, the Federal Reserve, the Bank of England or the European Central Bank show that if forward guidance is extremely complicated, that may have unintended results,”
- “Transparency is important … too complicated forward guidance or too complicated communication could–I don’t say ‘backfire’—be less efficient and sometimes even disruptive”
- “The bank will continue with the QQE, aiming to achieve that target, as long as it is necessary for maintaining it in a stable manner”
- “We central bankers, as well as market participants, may be less certain about what kind of impact exiting from QEs could have on the markets and economies.”
The BOJ is now buying around 70% of newly issued JGBs, which is going to make the exit process (when the time comes) tricky indeed. And may well have unintended consequences in the meantime (asset bubbles being a big concern).
