Can the BOJ’s next governor resist calls to exit the ultraeasy monetary policy?

All eyes are on the Bank of Japan’s next governor candidate, Kazuo Ueda, to figure out the nation’s future monetary policy direction after a decade of the unprecedented easing that occurred under the current governor, Haruhiko Kuroda.

Ueda, an eminent scholar specializing in monetary policy, repeated his already expressed views at a Lower House confirmation hearing on Friday that the current monetary easing, namely the yield curve control (YCC), is appropriate and thus will be maintained until the 2% price stability target is stably achieved. YCC applies a negative 0.1% interest rate on part of banks’ excess reserves, and maintains 10-year JGB yields at around 0% with the target range of 0.5%.

Meanwhile, he also said that he will monitor the adverse impacts of the current monetary easing on bond markets, as well as impacts of recent offsetting measures.

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