Bank of Japan Chief Nominee Kazuo Ueda Vows to Maintain Monetary Easing

The Yomiuri Shimbun

17:57 JST, February 24, 2023

The nominee for Bank of Japan governor Kazuo Ueda on Friday called the central bank’s current monetary policy “appropriate” and said he would maintain monetary easing.

The Rules and Administration Committee of the House of Representatives held a confirmation hearing for Ueda, a 71-year-old economist who has been nominated by the government as the next BOJ chief.

“The monetary policy that the BOJ is implementing is appropriate,” Ueda said during the hearing. “I intend to continue monetary easing in order to create an economic environment that will enable companies to raise wages.”

Ueda expressed a view similar to the current BOJ stance regarding a 2% inflation target. “I believe it will take some more time to achieve [the target] in a sustainable and stable manner,” he said.

The Japanese economy is “recovering from the coronavirus pandemic, but uncertainty is extremely high,” Ueda stressed.

The rate of increase in consumer prices has reached around 4%, but Ueda said it has been “driven by rising import prices, not attributed to strong demand.” According to Ueda, the rate is expected decline in the future.

Ueda emphasized close coordination with the government on monetary policy. “I will maintain monetary easing by creatively adjusting to various situations,” he said.

Ueda credited the monetary easing implemented since 2013 under current BOJ Gov. Haruhiko Kuroda for improving corporate earnings and employment and helping the nation out of deflation.

“I want to focus my efforts on carefully nurturing those buds for the time being,” he said.

Regarding the prolonged implementation of monetary easing, Ueda said it will take time for easing to produce effects, compared to under ordinary economic conditions, as deflation continued for a long period.

He said he would examine the adverse effects of monetary easing on market trading and other areas.

The BOJ chief nominee stopped short of specifying when to end easing and normalize monetary policy. “I can’t answer with certainty at this point,” he said.

Ueda was on the BOJ Policy Board for seven years from April 1998 after serving as a professor at the University of Tokyo.

The House of Councillors is scheduled to hold confirmation hearings next week for Ueda and BOJ deputy governor nominees Ryozo Himino, 62, a former commissioner of the Financial Services Agency, and Shinichi Uchida, 60, a BOJ executive director.

Following approval of both Diet chambers, the Cabinet will formally appoint the three to the BOJ leadership by mid-March.