Government debt twice the size of the economy will make exiting stimulus a nightmare for Bank of Japan Gov. Haruhiko Kuroda, according to the nation¡¯s former top currency official.
Makoto Utsumi, who oversaw foreign-exchange policy at the Finance Ministry from 1989 to 1991, said the central bank¡¯s of its balance sheet into debt with an average remaining maturity of up to 10 years made it impossible for Kuroda to pare stimulus ¡°for the foreseeable future¡± without causing bond yields to surge.
Speculation that the BOJ will accelerate its note purchases helped cut 10-year yields to a three-week low of 0.3 percent on Friday.
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