Hiroshi Watanabe is president of the Institute for International Monetary Affairs in Tokyo and is a former currency chief at the Ministry of Finance

Says the Japanese economy has recovered enough for BOJ to begin to cut back on its stimulus policy

  • Should start to reduce its annual bond-purchase target later this year
  • "Just as an endless intravenous drip becomes ineffective, monetary policy should be changed to reduce stimulus once the economy is no longer facing any headwinds"
  • "This would create a buffer for future needs. There is absolutely no reason to deter such a decision by saying we have to wait for inflation to reach 2 percent."

Bloomberg for more

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Huh ... if you follow ForexLive you'll know I've been banging on about this for a while.

  • The Bank of Japan has reduced its bond buying (YCC policy has meant reduced JGB buying) ... its only a matter of time (I reckon before the end of this year) before they acknowledge this by getting rid of the 80tln yen 'target'
  • They will abandon the 2% target (IMO ... but as to timing ... no idea ... I suspect in April 2018 once Kuroda's term expires)