Timing of exit from easy policy must be not too late, not too early

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“The timing of exit from the easy policy must be not too late but not too early,”  Bank of Japan (BoJ) board member Naoki Tamura said on Wednesday.

Additional comments

Whether scaling back easy policy early next year will depend on various data at the time.

Ending negative rate, YCC are all options in case BoJ were to exit easy policy.

Even if BoJ were to abandon negative rate, that is not monetary tightening or rate hike as monetary conditions will remain loose.

It will take a bit more time to judge whether Japan meets BoJ’s price target in sustainable manner.

In what order and what pace BoJ exits easy policy will depend on economic conditions at the time.

Ending negative rate becomes an option if sustainable, stable achievement of 2% inflation target comes into sight

Won’t comment on FX levels, moves.

Call on whether sustainable achievement of 2% inflation target can be foreseen could come before january-march next year, or later

BoJ’s July decision wasn’t directly targeted at FX.

Very important for FX moves to reflect economic, financial fundamentals.

BoJ will conduct monetary policy with close eye on impact of FX moves on Japan’s economy.

Market reaction

USD/JPY is paring gains on the above comments. The pais is retreating from intraday highs of 146.26, currently trading at 146.19, still up 0.22% on the day.