BOJ’s Amamiya says central bank ‘very far off’ from stimulus exit: Bloomberg

WELLINGTON (Reuters) – Bank of Japan Deputy Governor Masayoshi Amamiya said he sees an exit from ultra-loose monetary policy for the central bank as some time away, Bloomberg reported on Wednesday.

While Japan’s economy was maintaining its momentum to achieve the BOJ’s 2 percent inflation target, the central bank is “very far off from the exit” of ultra-easy policy, the former career bureaucrat told the news agency in an interview.

He said it was inappropriate to normalise monetary policy settings early to create policy room to address any future shocks to the economy.

But Amamiya also said the BOJ was carefully watching the potential cost of its massive stimulus programme, such as the impact of ultra-low rates on bank profits.

“I don’t think the side effects exceed the benefits at this point, but the effects are cumulative and we’re watching this carefully,” he was quoted as saying.

Despite five years of aggressive money printing, the BOJ has failed to achieve its elusive 2 percent inflation target as firms remain wary of raising wages and prices of their goods.

Some BOJ policymakers have openly endorsed warnings made by private analysts and market participants over the rising cost of prolonged easing, such as the damage to bank profits.

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