BOJ Deputy Governor Wakatabe says no policy change soon

The Deputy Governor of the Bank of Japan, Masazumi Wakatabe, said there would be no policy change next month shortly before the end of his term, which may dampen market speculation over early policy adjustments.

Wakatabe s comments came after the surprise December decision by the BOJ to widen the range of its yield curve control target. That move has spurred speculation that steps toward normalization may come sooner rather than later.

Watakabe said on Thursday in Shizuoka, central Japan that the modification was made to improve the sustainability of monetary easing under yield curve control. The bank's commitment to continuing with monetary easing has not changed at all. His remarks echo Governor Haruhiko Kuroda's repeated messages that the bank must continue with easing in order to achieve stable inflation backed by stronger wage growth. Together they signal that there will be no pivot at their last policy meeting between March 9 and 10, just before a new leadership is set to take over the BOJ helm.

Wakatabe will end his five-year term on March 19 a few weeks before Kuroda will end his decade-long stint on April 8.

Kuroda could surprise BOJ watchers with his track record. The doubling of the yield band came despite his belief that it would be harmful for the economy and equivalent to a rate hike in the past.

Market players are likely to be on alert over whether the governor will leave with a unexpected parting shot at the final meeting of his tenure after that abrupt turn-around.