Bank of Japan (BOJ) Governor Haruhiko Kuroda said on Wednesday that Japan is not in a state to exit from the easy monetary policy, as reported by Reuters.

Additional takeaways

"BOJ's funding scheme to assist efforts on climate change not aimed at aiding bank profits, mitigating side-effect of monetary easing."

"JGB buying is necessary to achieve 2% inflation target."

"How much JGBs BOJ will buy to defend its yield target depends on market conditions at the time."

"BOJ's fixed-rate bond-buying offer was made in light of such unusual market situation."

"If market conditions become unusual again, BOJ will of course use tools such as fixed-rate market operation."

"Our basic approach is to buy a sufficient amount of bonds to allow 10-year JGB to move 25 basis points up and down each around our 0% target."

Market reaction

USD/JPY edged higher with the initial reaction to these comments and was last seen posting small daily gains at 115.75.