Makoto Sakurai, a former member of the Bank of Japan’s (BoJ) monetary policy board, said in an interview on Thursday that the central bank could remove negative interest rates later this year to adjust the currently excessive level of monetary easing. .
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“They could do it at any time and it wouldn’t be a surprise, given the current economic recovery.”
“The BoJ has appeared cautious, but they have consistently taken policy action at a faster pace than expected.”
“Changing the negative rate would cause slight changes in the shape of the yield curve.”
“But the overall curve has already risen, so it’s okay for the far end of short-term rates to rise.”
“There is too much extraordinary monetary easing now.”
“The problem is that it does unnecessary things, like continuing to expand the BoJ’s financial balance sheet.”
Source: Fx Street
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