For a central bank that doesn't want to talk about an exit strategy, the Bank of Japan sure is talking a lot. The message: When you raise the subject, make sure you say you aren't even considering discussing the possibility of tightening monetary policy. It's the unwinding debate that isn't a debate.
In minutes published this week of their June meeting, BOJ officials devoted a meaty paragraph to the dangers of communicating an exit strategy. The public simply won't understand, they warned, and, in any case, the prospect remains a ways off and circumstances can change. If the bank had to change its narrative later, that would be even worse.
A couple of brave souls disagreed and said "it was important for the bank to thoroughly explain and gain a better understanding among the people of its thinking on monetary policy management." For their trouble, they earned this retort from a colleague that appears as the document's last word on the matter: "Even if the bank explained its exit strategy in advance, it was possible that the actual steps of an exit would differ from earlier explanations, as in the case of the Federal Reserve, and therefore careful preparations and thorough explanations were needed in communicating with the market."
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