Bank of Japan Governor Kazuo Ueda ruled out any need to change a key accord with the government for now, again pointing to a continuity of policy ahead of his first meeting at the helm of the central bank next week.
(Bloomberg) — Bank of Japan Governor Kazuo Ueda ruled out any need to change a key accord with the government for now, again pointing to a continuity of policy ahead of his first meeting at the helm of the central bank next week.
Responding to questions in parliament on Tuesday, Ueda said the thinking behind the 2013 joint statement with the government was appropriate. The comment suggests no sudden change of policy direction under the new governor at the April meeting.
The joint statement sets out the central bank’s commitment to its 2% price goal as part of a division of labor with the government to reinvigorate the economy.
“From the BOJ’s standpoint, we will make efforts to achieve the price target,” Ueda said. “By achieving that, companies and households will be able to fully demonstrate their potential and strive to boost productivity with confidence.”
The comments come amid ongoing speculation that the BOJ under its new leader will take action to adjust or dismantle its measures to control government bond yields and eventually start normalizing policy.
Many analysts have pointed to the need for the central bank to take action on yield curve control without prior warning to avoid a surge in market pressure ahead of a change.
Two-thirds of economists surveyed last month said they see the BOJ to start tweaking policy by June. Some 35% of respondents expect the joint statement to get revised sometime this year.
Since Ueda was picked by Prime Minister Fumio Kishida for the top BOJ job, he has stressed policy continuity by repeatedly saying it’s appropriate to keep up the BOJ’s massive monetary easing.
Ueda dodged questions by a lawmaker over whether the government should have done more to boost the nation’s growth potential over the past decade, saying it’s not appropriate to comment on government policies in detail. In the joint accord, the government pledged to conduct fiscal policies and regulatory reforms to boost growth.
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