BOJ’s Suzuki: Maintaining financial system stability is crucial for sustainable monetary easing

“Maintaining financial system stability is crucial in seeking to make the effect of monetary easing sustainable,” the Bank of Japan (BOJ) board member Hitoshi Suzuki said in a statement on Wednesday.

Additional comments

Must strike right balance between need to maintain market function and control rates, in seeking to guide YCC sustainably.

Fewer market players expect BOJ to cut rates further, which may be because of impact its policy is having on financial intermediation.

BOJ’s decision to clarify allowance range for long-term rate will help stabilise markets once volatility returns.

BOJ must be vigilant to health of its finances in buying ETF, J-REIT.

Desirable for BOJ to restrain ETFs buying in normal times, to curb as much as a possible increase in the balance of its ETF holdings.

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