BoJ governor nominee defends ultra-loose monetary policy
Tokyo, Feb 24 (EFE).- Economist and academic Kazuo Ueda, who will become the next governor of the Bank of Japan (B0J) on Apr. 9, said Friday that the institution’s existing monetary policy is “appropriate” in the country’s current economic context.
At a lower house confirmation hearing, Ueda acknowledged the pressure that the rise in inflation is exerting on the Japanese economy but defended the BoJ’s current ultra-loose measures to avoid a recession linked to its tightening.
Inflation has risen to over 4 percent in recent months due to the global increase in energy prices and raw materials.
“I believe it’s necessary (for the BOJ) to continue monetary easing to firmly support the economy and create an economic environment to enable companies to raise wages,” he said.
“More time is needed for the 2 percent price stability target to be achieved stably,” he added, local news agency Kyodo reported.
Ueda said he was aware that the BoJ’s ultra-loose measures, which include short-term negative interest rates (-0.1 percent) and yield curve control, produced some side effects.
He promised to review the measures that Japan’s central bank has adopted during the last 25 years.
Ueda also pointed out the factors that have come in the way of the central bank achieving its 2 percent inflation target, adopted in 2013 by current BoJ governor, Haruhiko Kuroda.
Among them, he said, are external factors such as the global financial crisis triggered by the Lehman Brothers’ bankruptcy in 2008, which had a negative impact on financial intervention and left little room for policy innovation. EFE