BOJ gives early sign of lift-off with warnings on the costs of easing - RTRS

Reuters quoted people familiar with the Bank of Japan (BoJ) thinking, as saying that the Japanese central bank is gradually dropping hints that it could scale back the stimulus earlier than expected, through a future hike in its yield target.

The people said: “Bank officials are now more vocal on the rising cost of prolonged easing, such as the hit to bank margins - a sign that their next move would be to roll back stimulus rather than expand it.”

One of the people said, ““The change in tone doesn’t have immediate policy implications, but it’s probably intentional.”

Another source noted: “The BOJ wants to make its policy framework more sustainable. Allowing longer-term rates to rise more would give banks some breathing space.”