BoJ Governor Haruhiko Kuroda appeared in the Parliament again today. He clarified that the objective of the quantitative and qualitative easing problem was to lift inflation to 2% target, rather than bankrolling the government debt.
He also pointed out “how to deal with the BOJ’s expanded balance sheet would be among key challenges for us when we were to exit from quantitative easing.”
However, “past experience of other central banks indicate that with a good mix (of redemption and re-investment of bonds), it’s possible to shrink our balance sheet at an appropriate pace, while keeping markets stable.”
