The central bank will reduce its bond buying and likely head toward policy normalisation when sustained achievement of its 2% inflation target comes into sight, Ueda said.
With trend inflation short of the BOJ’s target, however, the central bank must maintain current ultra-easy policy for now, he added.
“Big improvements must be made in Japan’s trend inflation for the BOJ to shift towards monetary tightening,” Ueda said.
“It’s not that I have no ideas on how to tweak the BOJ’s current policy. But the desirable tweak will vary depending on economic changes at the time,” Ueda said, adding it was premature to comment on how the central bank may shift policy.
Ueda said he was open to the idea of conducting a comprehensive review of the BOJ’s monetary easing framework, which has been proposed by board member Naoki Tamura.
“If the BOJ were to do a review, my feeling is that it should spend plenty of time to look into various aspects…
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