BOJ Could Start Talking About Ending QE in 2015 Q2

The Bank of Japan may start discussions on ending its ultra-loose monetary policy in the second half of fiscal 2015 when its inflation goal is expected to be achieved, one of the central bank’s board members said Wednesday.

“I believe there is a high possibility that we can begin (discussions) in the second half of fiscal 2015 when the (BOJ’s) 2 percent (inflation) goal is expected to be achieved,” Ryuzo Miyao said at a meeting of business leaders in Nagasaki Prefecture.

Miyao, one of the nine members of the Policy Board who voted for the BOJ’s Oct. 31 decision to expand its aggressive easing, said the additional monetary stimulus increases the likelihood of meeting the inflation goal in the period starting next October, and that it will allow the bank to start considering exiting from the policy.

The BOJ would specifically study how it could slow the pace of purchasing financial assets from banks as well as how to return to a more conventional policy of affecting short-term interest rates, Miyao said of the potential exit debate, in reference to a recent similar move by the U.S. Federal Reserve.

Miyao defended the BOJ’s additional easing, over which the board was split with four members voting against the decision endorsed by BOJ Governor Haruhiko Kuroda and his two deputies.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza