BOJ’s Kuroda: Bond purchases are for monetary policy purposes, not for the government

Commenting on the Bank of Japan’s (BOJ) monetary policy tools, Governor Haruhiko Kuroda said in a statement on Wednesday, the bond purchases are for monetary policy purposes and not for the government.

Additional quotes

Bond buying has slowed significantly as markets remain calm.

BOJ is buying medium, long and super-long JGBs in a balanced manner to keep yield curve stably low.

BOJ conducting ETF buying in flexible manner.

ETF purchases not significantly crippling market functions.

Does not think ETF purchases cause serious corporate governance problems.

Aware of the view that ETF purchases may lead to decline in stock market function.

Various tools, including its ETF buying, will be target of review at march examination

Too early to consider exit strategy

Can't comment now on what tweaks BOJ will make as that will depend on findings of march review.

Premature to discuss how BOJ could realize, make use of, huge potential capital gains on its ETF holdings.

Market reaction

USD/JPY is challenging daily highs at 105.70 on Kuroda’s comments, up 0.42% on the day.

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