Speaking at a recent press conference, Kovac told reporters (per Marca) that James will be staying at the club and that they are in full control over the player's future
“We have a loan deal which is 100% valid. It will only end if we want to. He’s going to stay here," he asserted.
It has been suggested that the Colombian playmaker wanted to go back to Real Madrid this summer following the departure of Zinedine Zidane, although the ball is in Bayern Munich's court in this situation.
James is currently halfway through a two-year loan deal with the Bundesliga champions, meaning that Real Madrid would have to negotiate with Bayern if they wanted to bring the 27-year-old back to the Santiago Bernabeu a year earlier than agreed.
It could be an option that Real Madrid are willing to pursue, with James Rodriguez far more likely to suit Julen Lopetegui's style of play in the Spanish capital. However, it will be difficult to convince Bayern Munich to release the World Cup star from his loan a year early.
Furthermore, it's strongly possible that James could never feature in a Real Madrid shirt again, due to the fact that Bayern have an option to sign him on a permanent basis once his loan deal expires next summer.