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5/18/2017, 8:17 AM (Source: TeleTrader)
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BoJ's QE exit could begin with bank deposit rates

Policymakers from the Bank of Japan haven't yet decided on how to unwind stimulus when it becomes necessary, Deputy Governor Kikuo Iwata said on Thursday. Still, he added, one way could be to increase rates on bank deposits, he suggested while speaking in parliament. That means the central bank can opt to pay more on lenders' excess reserves, but no particular strategy has been studied, the BoJ's top official explained. Governor Haruhiko Kuroda has said Japan can learn can from the United States Federal Reserve's experience in policy tightening.

Earlier, Iwata has been expressing a more determined stance, indicating time is nearing for quantitative easing measures to be cut back. In line with the bank's general position, he has been calling on employers to lift wages to bolster the economy and prices. Last month the rate-setter said an exit strategy is being studied.

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