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Japan’s New Central Bank Governor Kazuo Ueda Assumes Office
On April 10, Kazuo Ueda took over as the new central bank governor of Japan, succeeding Haruhiko Kuroda. In his first press conference on Monday, he was joined by his two deputies, Shinichi Uchida and Ryozo Himino.
BOJ Governor Ueda on Financial Stability
Ueda expressed that the Bank of Japan has a big responsibility to achieve financial system stability, and that as the environment surrounding Japan’s banking system becomes more severe, it’s extremely important to ensure Japan’s financial intermediation is functioning smoothly.
Impact of Global Banking Crisis on Japan’s Economy
According to Ueda, the US and European banking crises are unlikely to have a big impact on Japan’s economy at this time, but developments will be closely watched.
Monetary Easing Trajectory and Policy
Ueda also mentioned that the Bank of Japan’s current monetary easing is powerful and that they will strive to appropriately grasp economic, price, and financial developments to see if trend inflation will stably and sustainably achieve 2%. If it can be achieved, monetary policy may need to be normalized, but if not, a more sustainable framework with an eye on the side-effects of monetary easing could be necessary.
Should the BOJ Tweak Yield Curve Control Soon?
Ueda believes that looking at current economic, price, and financial developments, it’s appropriate to maintain yield curve control for now.
Kuroda’s Stimulus Plan to be Continued
Ueda has affirmed that the Bank of Japan will maintain its previous leadership’s massive stimulus.
Overseas Counterparts and Monetary Framework
Deputy Governor Himino stated that Japan’s financial system is stable and has sufficient buffers to weather shocks. However, there are hidden vulnerabilities overseas, and he hopes to engage in close dialogue with financial institutions and coordinate closely with overseas counterparts. Deputy Governor Uchida believes that the Bank of Japan’s monetary framework is sufficiently able to cope technically, but accurate judgment on developments is most important and the timing of the most appropriate policy move will be carefully considered.
Reporting by Leika Kihara; Editing by Sherry Jacob-Phillips
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