Finally, the wait is over as the new Bank of Japan's governor 'Kazuo Ueda' has assumed office. The new BoJ governor has a bumpy road ahead of him amid the slow global growth and problems in sustaining wages.
If the new governor is to phase out the current BOJ policy of stimulus, he would need to improve the economic measures of Japan!
Kazuo Ueda is 71 years old and is a famed economic academic... He succeeded the Korudo, who got his fame for his ultra-loose monetary policies and stimuli measures. The new chief of BOJ is expected to hold a news conference along with the deputy governors in the next few days.
An End To YCC Policy?
The real question now is how and when Ueda will be able to put an end to the bond yield control policy as well as the stimulus measures.
Although Japan's prime minister has not made any requests to the new chief for monetary policy, the head of the ruling party's coalition has asked the new chief to go slow with the policy shift.
According to the chief of the Komeito party, he is hopeful that the economic growth, as well as the price targets of BOJ, could be achieved without any abrupt changes.
So far, even Ueda is hinting towards keeping the current Ulta-easy policies in place to achieve the 2% inflation growth.
Inflation Is Key
The markets are now wondering what will happen when the BOJ inflation target is achieved or even exceeded. In such a scenario, the BOJ is expected to tweak or completely end its YCC policy.
Unlike most countries, Japan has been struggling with really low inflation which has become stagnant for years now! In January, the inflation in Japan reached 4.2%, which is a 41-year high, but the core consumer inflation continues to hover above the 3% target.