BoJ bond buying program will continue, according to the board member of BoJ, Makoto Sakurai. He opposes markets’ view on Boj’s stimulus plan.
BoJ bond buying program will stay
Despite the new policy aiming interest rates, the BoJ will still continue to buy government bonds. This announcement came as oppose to the view that BoJ bond-buying program was approaching a limit.
Yet, the former academic has cautioned the government, stating that the state and firms need to do more to support the BoJ in its attempt to boost the inflation. Moreover, the BoJ is also struggling to increase the growth rate. Mr. Sakurai argued that the government and firms could raise the wages and encourage innovation to help BoJ.
Mr. Sakurai has stated that “there is no magic wand” to boost Japan economic growth. He believes that BoJ is not able to revitalize the economy of the state with monetary easing alone.
Mr. Sakurai opposes market’s views
Mr. Sakurai’s comments have been perceived as a sign that the central bank still did not finish its easing stimulus. The BoJ decided to change its policy target to interest rates from money printing in September.
A number of analysts believe that the central bank will attempt to reduce its huge asset buying in the long-run. This is due to the broad views that the BoJ will run out of bonds to buy in the near future. However, Mr. Sakurai disagreed with such views. He has stated:
“We will continue to buy huge amounts of government bonds to control interest rates. Our yield curve control is operating smoothly.”
Moreover, Mr. Sakurai has dismissed the worries that the BoJ’s huge purchases were confronting Japanese real-estate investment trust (REIT) market. Additionally, he has voted for the change in BoJ policy with the majority of the board.
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