BoJ Kuroda: We won’t know until later whether recent stock rises are excessive

The Bank of Japan's governor Haruhiko Kuroda is crossing the wires and has said ''we won’t know until later whether recent stock rises are excessive.''

Key comments

BoJ won't end, seek exit from its ETF buying for time being.

There is still very high uncertainty over economic outlook.

Can't ignore downside risks to Japan, global economies even as vaccine rollouts proceed at rapid pace in western economies.

We won't know until later whether recent stock rises are excessive.

BoJ is buying ETFs in flexible way, have been buying 'very small' amount since last autumn as markets stablised.

Recent stock rally reflects the market's optimism toward economic outlook, vaccine rollout.

Premature to debate exit from massive stimulus programme including BoJ's ETF buying.

When the achievement of our price target approaches, we will debate the exit strategy at our policy meeting, communicate our stance accordingly.

Don't have a preset idea on what to do with BoJ's ETF holdings, which will be debated at BoJs policy meeting when exit from easy policy nears.

BoJ will continue powerful easing, but will also be vigilant to potential financial risks associated with its ultra-loose policy.

Market implications

There is a current focus on the strength of the yen and continued jawboning can be expected at times of dollar weakness and higher US yeilds. 

The yen is on the backfoot as risk appetite has started off the week on a strong footing. However, there may only be so far the bulls can go before supply emerges in the media term.

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