BoJ’s Suzuki: There is room to debate a fine-tuning of yield curve control

Bank of Japan (BoJ) board member Hitoshi Suzuki said in the interview with the Mainichi daily newspaper over the weekend, there is room to debate a fine-tuning of the central bank’s yield curve control (YCC) policy, suggesting that the Japanese central bank could raise interest rates before it achieves its 2% price target, Reuters reports.

Key Quotes:

“It’s inappropriate for interest rates to show no changes until the 2 percent inflation target is hit, and then jump abruptly once the target is achieved.”

“There is room to debate a fine-tuning of YCC once inflation heads near 2 percent so that markets can gradually accept the changes.”

“If the health of financial institutions is in trouble, it’s possible monetary policy won’t function well.”

“I‘m carefully watching how our policy of controlling the yield curve affects the economy, and whether or not it is creating any distortions.” 

“The BOJ’s ETF buying is part of its monetary policy framework and must be continued to achieve 2 percent inflation at the earliest date possible.” 

“We won’t make decisions on our ETF buying looking just at the stock market. But changing the amount or method of our purchases is a future option.”