BOJ adjustment could be first step towards exit from aggressive monetary easing

According to Takatoshi Ito, Haruhiko Kuroda's contender, the Bank of Japan's policy adjustment would be the first step towards an exit from a decade of aggressive easing.

As a professor at Columbia Business School and a close ally of Kuroda, Ito said that the unexpected widening of the bond yield range is a positive development. It would improve the functionality of Japan's government bond market. 

Recently, Ito has seen increasing signs that inflation may remain above the Bank of Japan's 2% target. This is due to the fact that cost-push factors are fuelling a positive price mechanism. It, in turn, is based on higher wages and stronger consumption.

Ito is one possible successor to replace Kuroda when his term expires in April. Economists, however, see current deputy Masayoshi Amamiya and former deputy Hiroshi Nakaso as main candidates.