BOJ Ueda - more - If trend inflation does not improve, maintain YCC

Bank of Japan Governor Nominee Ueda

Ueda testimony before the lower house of the Diet as part of his nomination and confirmation process.

Earlier:

• BOJ Ueda: standard monetary policy to not immediately respond to supply-driven inflation
• BOJ Ueda says inflation is peaking

More now:

• See no need to tweak language on price target of govt-BOJ policy statement
• Usually increasing money printing will boost demand but such effect has been diminished now with interest rates at zero
• Boj took various steps to ease market distortion including in December, now scrutinizing impact
• There are various possibilities on what YCC could look like
• Won't comment now on what appropriate form could be for YCC
• If trend inflation improves significantly, BOJ needs to move toward monetary normalisation
• If trend inflation does not improve, BOJ must consider ways to maintain YCC while being mindful of market distortions
• BOJ won't conduct bond-selling operation
• If BOJ were to normalise monetary policy, it will likely do so by raising interest paid to reserves parked with central bank
• If BOJ were to exit easy policy, must think about what to do with its etf holdings but now is not time to do so