NARA, Japan, Feb 8 (Reuters) - Bank of Japan (BOJ) Deputy Governor Shinichi Uchida said on Thursday the central bank is unlikely to raise interest rates aggressively, even after ending its negative interest rate policy.
If sustained achievement of its 2% inflation target comes into sight, it would also be "natural" for the BOJ to end its purchases of risky assets such as exchange-traded funds (ETF) and trust funds investing in property, Uchida said in a speech to business leaders in Nara, western Japan.
Uchida said an end to its negative rate policy would mean the BOJ would effectively be hiking short-term interest rates by 0.1 percentage point.
"If sustainable and stable achievement of the 2% inflation target comes in sight, our large-scale monetary easing will have fulfilled its role and we'll explore whether it should be revised," Uchida said.
"Regardless of the timing of policy revision, we need to devise both communication and market operation steps to avoid creating discontinuity in financial markets," he said.
Under its massive stimulus programme, the BOJ currently guides short-term interest rates at -0.1% and the 10-year government bond yield around 0%. It also buys government bonds and risky assets to pump money into the economy. (Reporting by Leika Kihara; Editing by Jacqueline Wong)
