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June 6 Reuters Bank of Japan Governor Kazuo Ueda said the central bank should reduce its huge bond purchases as it moves toward an exit from massive monetary stimulus, reinforcing his resolve to steadily scale back its nearly 5trillion balance sheet.

The remarks keep alive expectations the central bank could embark on a fullfledged tapering of its bond buying as early as its policy meeting next week.

In March, the BOJ made a landmark shift away from its radical monetary stimulus by ending eight years of negative interest rates and yield curve control YCC, a policy that caps the benchmark 10year yield around 0 with huge bond buying.

But it pledged to keep buying roughly 6 trillion yen worth of government bonds per month to stop the March policy shift triggering an abrupt spike in yields.

We are still scrutinising market developments since the March decision, Ueda told parliament on Thursday. As we proceed in exiting our massive monetary stimulus, it39;s appropriate to reduce bond purchases, he said.

Ueda has repeatedly said the BOJ will eventually taper its huge bond buying, but offered no clues on how soon it will start doing so.

The BOJ currently has 750 trillion yen 4.8 trillion in assets on its…