|
 He also said that exiting from the current ultra-easy monetary
policy may be more difficult than when the BOJ last ended its
quantitative easing in 2006, because the bank now loads up on more
long-term government debt and risky assets.
"The day of constructive ambiguity is over and transparency is
extremely important to avoid unnecessary shock to the economy,"
Kuroda told a seminar at the University of Tokyo.
But he added that offering complicated messages to markets, which
are diverse and consist of various participants, may have unintended
consequences.
"Too complicated forward guidance, or too complicated communication,
could be less efficient and sometimes even disruptive," he said on
Saturday.
Many central banks, including the U.S. Federal Reserve and the Bank
of England, have resorted to "forward guidance" in lowering
long-term interest rates, which is to offer guidance on how long
they will maintain their ultra-loose policies.
But the Fed was criticized as misguiding markets when it held off on
tapering its massive stimulus, despite offering signals in May that
it may do so in coming months.
Kuroda has insisted on keeping the BOJ's message simple, which is to
maintain its massive stimulus until 2 percent inflation is achieved,
and has refrained from offering specific information on what will
trigger an exit from that policy.
The BOJ offered an intense burst of monetary stimulus in April,
pledging to double base money via asset purchases to achieve 2
percent inflation in roughly two years.
[to top of second column] |
That was a departure from the approach of Kuroda's predecessor, who
offered incremental stimulus in response to slumps in the economy.
Kuroda reiterated that the BOJ's experiment was having the
anticipated outcome on the economy, stressing that the economy was
on track toward achieving the bank's price target.
Compared with its previous quantitative easing launched from 2001 to
2006, the BOJ now buys far larger amounts of government bonds with
longer periods until maturity.
That means ending the current policy may be more difficult than in
2006, Kuroda said, as it will take longer for such long-term debt to
fall off the BOJ's balance sheet.
Still, he stressed that there was no substantial difference in the
difficulty of ending conventional easy policy, which manipulates
short-term rates, and unconventional policy that tries to influence
long-term rates with asset purchases.
"Even when you deploy a traditional, short-term interest rate
policy, exiting from ... prolonged monetary easing would not be
easy," he said. "The main difference ... is that we have very few
experiences" on ending unconventional policies.
(Editing by Edmund Klamann and Michael Perry)
[© 2013 Thomson Reuters. All rights
reserved.] Copyright 2013 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
