*
Tweak to YCC 'undoubtedly' becomes option if conditions
met
*
BOJ won't rule out any option on future policy - Uchida
*
Trend inflation important, but looking at various data
(Adds deputy Himino's quote)
By Leika Kihara
TOKYO, March 29 (Reuters) - Bank of Japan (BOJ) Deputy
Governor Shinichi Uchida said on Wednesday a tweak to the
central bank's bond yield control policy will "undoubtedly"
become an option if economic and price conditions justify
phasing out stimulus.
In his first public appearance since assuming the post
earlier this month, Uchida said the BOJ may consider various
means or policy steps, including those not taken now, once
prospects heighten for inflation to sustainably hit its target.
"If various conditions fall in place, some sort of change to
yield curve control may become necessary. If conditions turn
positive, (a tweak) will undoubtedly become a possibility,"
Uchida told parliament.
"We won't rule out any option, if we deem it as necessary
for Japan's economy and achievement of price stability," Uchida
said, when asked by an opposition lawmaker whether the BOJ could
raise its long-term yield target, while keeping short-term
interest rates very low.
Uchida said trend inflation was "extremely important" in
judging whether Japan will sustainably meet the BOJ's 2% price
target.
Rather than focusing on a particular set of indicators,
however, the central bank will look comprehensively at various
data in setting monetary policy, he added.
A career central banker, Uchida is one of two deputy
governors. The other deputy, Ryozo Himino, is the former head of
Japan's banking regulator. Both assumed their posts on March 20.
Under yield curve control (YCC), the BOJ guides short-term
rates at -0.1% and the 10-year bond yield around 0% as part of
efforts to reflate growth and sustainably hit its 2% inflation
target.
The BOJ's huge bond buying to defend its yield target has
drawn criticism from analysts and some lawmakers for causing
dysfunctions in the market and distorting the shape of the yield
curve.
With inflation already exceeding its target, markets are
rife with speculation the BOJ could tweak or end YCC when new
governor Kazuo Ueda succeeds incumbent Haruhiko Kuroda whose
second, five-year term ends in April.
BOJ officials, including Kuroda, have repeatedly said the
central bank will not roll back its massive stimulus until the
recent cost-push inflation turns into one driven by strong
demand and higher wage growth.
Deputy governor Himino echoed that view on Wednesday,
telling the same parliament committee the BOJ must maintain
ultra-loose policy to support the economy and lay the groundwork
for firms to hike wages.
(Reporting by Leika Kihara; Additional reporting by Tetsushi
Kajimoto; Editing by Christian Schmollinger & Shri Navaratnam)
