(Bloomberg) -- The Bank of Japan may be able to step toward normalizing policy this year by achieving its sustainable inflation target, according to Takatoshi Ito, an ally of Haruhiko Kuroda and a contender to replace him in April. 

“Governor Kuroda’s successor will need a delicate balance in handling policy, but if things go well, 2023 could become a historic year when the BOJ achieves its price target and starts stepping toward normalization,” Ito said in an article for Forbes Japan, released on its website Thursday. 

Ito is known to have a close relationship with Kuroda. The governor has credited Ito for convincing him of the significance of a 2% inflation target. 

Economists see the Columbia University professor as a candidate to either replace Kuroda or one of his deputy governors after the current top brass steps down by early April. 

If Japan’s economic and inflation conditions allow the BOJ to declare the achievement of its price target, that would warrant further adjustments to its yield curve control framework and the raising of the negative interest rate, Ito said. 

“The BOJ would need to take a series of steps without making a mistake in the order” including changing short and long term rates, lowering bond purchases and shrinking bond holdings, Ito said.

Economists have brought forward their expectations for a policy change after Kuroda shocked global financial markets by tweaking the YCC framework in December. The governor has repeatedly said the doubling of the movement band around the BOJ’s yield target was not a step toward normalization but a move aimed at improving the sustainability of easing.

While Kuroda’s explanation was reasonably convincing, Ito indicated that the move wasn’t entirely unrelated to the normalization process.

“It may not be a step, but there’s no doubt it’s preparation to make a step,” Ito said.   

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