TOKYO: Bank of Japan BOJ Governor Haruhiko Kuroda said on May 26 that the central bank should maintain its ultra-slow monetary policy, even though consumer inflation is expected to slow next year and beyond, despite rising energy costs, and the central bank's 2 per cent target this year.
When the right moment comes, the BOJ's board will plan an exit from its easy policy and lay it out to the public, he said.
The key would be to raise interest rates and scale back the BOJ's expanded balance sheet, Kuroda told parliament on Thursday.
The BOJ can combine various means to make sure markets are stable and exited from easy policy. He said that it won't be easy to do.
The yen gained half of a yen to 126.61 to the dollar on Thursday. It was up about 0.4 per cent at 126.85.
Kuroda said that if they knock down US share prices, interest rate hikes by the US Federal Reserve may not necessarily weaken the yen against the dollar.
The prime minister Fumio Kishida told the same parliament session that it was hard to say whether the yen's weakness would be short-lived or prolonged.
Sharp yen moves are undesirable. Kishida said that the yen hurts households and some businesses because of higher costs, which is why a weak yen benefits exports and firms with overseas assets.