Yen jumps on BoJ chief Kuroda's reference to QE exit
The Bank of Japan will begin to ponder how to exit its ultra-loose monetary policy at some point next year, if justified by economic conditions, next year, Governor Haruhiko Kuroda said.
Although analysts appeared to be taking his remarks in stride, dollar/yen fell 0.53% to 105.63 as a result, while the yield on the benchmark 10-year Japanese government bond was three basis points higher at 0.068%.
Speaking at his parliamentary confirmation hearing, Kuroda said: "Right now, the members of the policy board and I think that prices will move to reach 2% in around fiscal 2019 (which begins in April 2019). So it's logical that we would be thinking about and debating exit at that time too.
"I'm not saying that the negative rate of 0.1 percent and the around 0 percent aim for 10-year bond yields will never change, but it is possible. We will be discussing that at each policy meeting."
Kuroda, who's current term was due to expire in April, had been nominated to serve for another five-year term.
Acting as a backdrop, data published overnight showed consumer prices in Tokyo rising at a faster-than-expected clip of 0.9% year-on-year in February-
A separate report revealed that the country's rate of unemployment dropped by three tenths of a percentage point in January to reach 2.4% (consensus: 0.8%).
However, industrial production and consumer spending figures released earlier in the week led economists at Capital Economics on Friday to tell clients: "Dismal industrial production and weak consumer spending figures for January suggest that Japan’s longest period of uninterrupted expansion since the late 1980s will come to an end this quarter.
"We reiterate our forecast that growth will slow this year as the economy is running into capacity constraints."