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Too early to discuss specific exit strategy now - Ueda
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If BOJ were to sell ETFs, it would do so at market price
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Rising inflation, wage growth keeps BOJ under pressure
(Adds Ueda's quotes, context on inflation, BOJ policy)
By Leika Kihara
TOKYO, May 10 (Reuters) - Bank of Japan Governor Kazuo
Ueda said on Wednesday the central bank will debate an exit
strategy from its ultra-loose monetary policy, and communicate
it to the public, once prospects to achieve stable inflation are
in place.
Speaking in parliament, Ueda said it was too early to
discuss specific plans of an exit from the BOJ's massive
stimulus programme, including how it could unload its huge
holdings of exchange-traded funds (ETF).
But he said the central bank would likely sell the assets at
market price if it were to do so in the future.
"The BOJ's ETF purchases have helped underpin consumption
and capital expenditure" by preventing market instability from
hurting household and corporate confidence, Ueda said.
"We buy ETFs as part of our massive stimulus programme. We
believe it will take a bit more time for Japan to sustainably
and stably meet our price target," he said.
Under a policy dubbed yield curve control, the BOJ sets a
short-term interest rate target of -0.1% and caps the 10-year
bond yield around zero. It also pledges to buy ETFs in huge
amounts in times of market turbulence, as part of efforts to
sustainably achieve its 2% inflation target.
Japan's core consumer inflation hit 3.1% in March, well
above the central bank's target, and an index excluding fuel
costs rose at the fastest annual pace in four decades in a sign
of broadening price pressure.
The BOJ has described the price rises as temporary and
driven by rising import costs, but some in the nine-member board
have warned of the risk of an overshoot in inflation as wage
growth picks up.
With inflation exceeding the BOJ's target since April 2022,
markets have been rife with speculation Ueda will soon phase out
his predecessor's massive stimulus programme that has drawn
public criticism for distorting market pricing and crushing bank
profits.
(Reporting by Leika Kihara; Editing by Shri Navaratnam and
Jacqueline Wong)
