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BOJ’S TAKATA: NEEDS TO CONSIDER TAKING FLEXIBLE RESPONSE INCLUDING EXIT FROM MONETARY STIMULUS

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Bank of Japan (BoJ) board member Hajime Takata said on Thursday that the central bank “needs to consider taking flexible response including exit from monetary stimulus.”

Additional takeaways

Achievement of 2% inflation target is becoming in sight despite uncertainty of economy outlook.

Exit measures would include abandoning yield curve control framework, ending negative rates, overshoot commitment.

Need to bear in mind taking balance between effect of easing and side effects.

Economy is entering cycle of rising wages and prices, away from chronic deflation cycle.

In case for entering exit, boj would need to conduct appropriate policy steps while paying attention to health of its balance sheet.

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