New Bank of Japan chief vows to keep stimulus, shuns premature tightening

BANK of Japan Governor Kazuo Ueda said on Wednesday the central bank must pay more attention to the risk of failing to meet its 2 per cent inflation target with premature monetary tightening, rather than being behind the curve in combating too-high price growth.

While other countries are experiencing elevated inflation, the situation is “quite different” in Japan, Ueda said in Japan’s G7 chair briefing with Finance Minister Shunichi Suzuki.

“I don’t deny it as a possibility,” Ueda said when asked by a reporter whether Japan could risk being behind the curve in addressing the risk of too-high inflation by keeping monetary policy ultra-loose for a prolonged period.

“But the BOJ must pay more attention to (the risk of) failing to achieve 2 per cent inflation” with a premature end to easy policy, rather than that of a delay in raising interest rates, said Ueda, who is in Washington for his debut international meeting since assuming the post on Sunday.

Ueda said he explained to his counterparts at the Group of Seven (G7) meeting that the BOJ will continue its monetary easing until its 2 per cent inflation target was met in a stable and sustainable fashion. REUTERS