The Japanese government's nominee for the next governor of the Bank of Japan (BoJ), Kazuo Ueda, underscored that the central bank would cease its operations on large-scale bond buying once the inflation target of 2% is met, adding that the goal of asset purchases is not to monetize debt.
Ueda cautioned, however, that in the event that the inflation outlook does not improve, the central bank will need to consider different steps in order to maintain yield curve control while keeping in mind market distortions. "It's true minus rate has had negative impact on financial intermediation," he argued, noting that the central bank of Japan has taken steps to reduce "side-effects of minus rate policy."
"There are various possibilities for the future of yield curve control," the 71-year old economist underlined, without disclosing much detail.
