BoJ Governor Haruhiko Kuroda said today that the central could debate stimulus exit if policy makers see increasing chance of hitting the 2% inflation target. He noted that “when the possibility of achieving our price target heightens, conditions of an exit would fall into place. The BOJ’s policy board could then discuss conditions for an exit.”
However, he emphasized that “With achievement of our price target still distant, it will create market confusion if we explain specific means and timing of an exit (from the easy policy) now.” Also, he warned that “if there is strong uncertainty about future growth, firms will hesitate to raise wages.” He added that “even if firms’ wage- and price-setting stance becomes more proactive, inflation expectations may not rise smoothly.”
