Yields in Japan stable at a low level, one result of YCC policy.
BoJ has bought 75% of JGBs issued in FY 2017 so far.
Will struggle to keep rates low if market trust in JGBs is lost.
By combining various tools, it is possible to shrink BoJ’s balance sheet at an appropriate pace while maintaining market stability.
BoJ is still distant from its price target.
What to do with large balance sheet is one issue at time of exit.
Thinks that it will be possible to shrink the balance sheet then.
There are various tools to exit easing policy - including letting debt mature.
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