When the Bank of Japan begins normalizing monetary policy, it will be a "very gradual" process, Governor Haruhiko Kuroda said, Reuters reported.
The BOJ will halt its aggressive monetary easing once the 2% inflation target is achieved and economic growth is stable, Kuroda said. Core consumer prices rose only 0.9% in January from a year ago, well below the target. He added that financing public debt, which the BOJ has been doing to keep 10-year yields near zero, is not part of the central bank mandate.
"Assuming we do meet the 2% price target and then normalize policy, then this process would be very gradual and take economic conditions into account," Kuroda said.
Kuroda cited the U.S. Federal Reserve as an example of a central bank slowly exiting from quantitative easing and normalizing monetary policy while remaining vigilant to risks to the outlook, Reuters reported.
The central bank governor's remarks came a day after U.S. Federal Reserve Chairman Jerome Powell told a congressional committee he may revisit how many rate hikes he would recommend in light of stronger recent economic data.
Kuroda's confirmation hearing for his reappointment as governor is scheduled on March 2, a lower house official said Feb. 28. Kuroda will need approval by both chambers, but it is a near-certainty as he has been endorsed by Prime Minister Shinzo Abe, whose ruling coalition holds a comfortable majority.
