Bank of Japan seeks ways to mitigate cost of monetary easing: board member

[TOKYO] The Bank of Japan will continue to seek ways to improve its policy framework to mitigate the cost of monetary easing, board member Hitoshi Suzuki said, warning of the strain prolonged ultra-low interest rates could inflict on bank profits.

Japan's banking sector remains stable and corporate funding strains are easing, though any further delay in Japan's economic recovery could increase credit costs for financial institutions, said Suzuki, a former commercial banker.

"We will continue to seek room to further improve our monetary policy by carefully weighing the effect and cost of monetary easing," Suzuki said in a speech on Thursday.

"In doing so, I believe we must pay close attention to the accumulating cost of monetary easing."

Suzuki has voted with the majority of the board in maintaining the BOJ's massive stimulus programme, but has repeatedly warned of the pain prolonged ultra-low rates are inflicting on bank profits.

In March, the BOJ fine-tuned its monetary policy framework to make it more sustainable including by allowing bond yields to move more flexibly around its 0 per cent target.

REUTERS