BANK of Japan Governor Kazuo Ueda said on Friday the central bank will eventually scale back its government bond purchases, but will hold off on doing so for the time being.

“We’ve been intervening in the government bond market quite heavily. We would like to decrease our bond buying in the future. But for now, we’d like to take a wait-and-see approach to see how markets absorb our new policy,” Ueda told parliament.

The BOJ ended eight years of negative interest rates and other remnants of its unorthodox policy on Tuesday, making a historic shift away from decades of massive monetary stimulus that was aimed at reviving the economy and quashing deflation.

While the central bank ditched its bond yield control policy, it pledged to roughly maintain the pace of bond purchases at roughly 6 trillion yen (S$53 billion) per month.

The BOJ‘s decision on Tuesday marked an exit from former Governor Haruhiko Kuroda’s radical monetary stimulus that consisted of negative interest rates, bond yield control and a huge asset-buying programme.

When asked by a lawmaker to evaluate the pros and cons of the BOJ‘s huge asset-buying programme deployed in 2013, Ueda said the move helped arrest sharp yen rises that were hurting Japan’s economy at the time.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Ueda, however, declined to comment on recent currency moves.

The dollar hit a four-month high of 151.84 yen on Friday partly on investors’ bets that Japan’s interest rates will remain stuck around zero, thereby keeping the gap between US borrowing costs large. REUTERS