Markets are rife with speculation that Kazuo Ueda, who becomes Bank of Japan (BOJ) governor on Sunday, will dismantle incumbent Haruhiko Kuroda’s massive stimulus programme that has drawn criticism for distorting market pricing and crushing bank profits.
In a sign he will be in no rush to shift policy, Ueda told a parliamentary confirmation hearing in February that he will “spend time and engage in thorough discussions” with BOJ board members on how to address the side-effects of prolonged easing.
But he also said there was no “magical” policy that cures economic woes, a sign he will shift away from his predecessor’s shock-and-awe approach of deploying a range of radical steps with a strong focus on achieving the BOJ’s 2% inflation target.
So far, Ueda has offered few clues on when and how the BOJ could phase out the current stimulus package that combines huge asset buying, negative short-term interest rates and a cap on the 10-year bond yield…
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