Japanese Prime Minister Fumio Kishida said it would be important for the Bank of Japan to make appropriate decisions on monetary policy as markets change rapidly, indicating his desire for flexibility under the new governorship.
(Bloomberg) — Japanese Prime Minister Fumio Kishida said it would be important for the Bank of Japan to make appropriate decisions on monetary policy as markets change rapidly, indicating his desire for flexibility under the new governorship.
Kishida was responding to questions in a parliamentary committee about his nominee for BOJ governor, Kazuo Ueda, and the future of Japan’s ultra-easy policy, dubbed “Abenomics” after the late former Prime Minister Shinzo Abe.
“From now on, the situation around the world and in the markets is going to change rapidly,” Kishida said. “In that situation it’s important to make appropriate decisions.”
‘Mr. Yen’ Says Ueda May Raise Rates by October, Currency to Gain
Current governor Haruhiko Kuroda came under fire last year for sticking with loose policy even as the yen plummeted against the dollar, worsening the inflation that has hurt many households and businesses. His successor was named this week, amid concerns about slower-than-expected economic growth.
While Ueda’s past comments suggests he’s neither a strong advocate of monetary easing nor tightening, his nomination has renewed market expectations for policy normalization this year. Kishida’s latest comments suggest the government is more willing to see policy flexibility.
Kishida also said the BOJ would decide whether to continue with Abenomics based on market conditions. He added that it was too early to say whether there would be any changes to the 2013 accord between the central bank and the government, under which they pledged to seek stable 2% inflation.
Earlier in the day Kishida told the committee Ueda — an academic economist with close ties to the central bank — was the best choice for the top job in terms of both theoretical and practical skills. The premier made the pick with “sufficient consideration” for the effect on the markets, he added.
Ueda is likely to face confirmation hearings in parliament’s lower house as soon as Feb. 24, and in the upper house on Feb. 27, the Yomiuri newspaper said Tuesday.
Kishida also made the following comments:
- Abenomics succeeded in creating a situation that isn’t deflation
- Want ‘New Capitalism’ to achieve economic growth including structural pay rises
- BOJ has carried out policy with consideration for side-effects
–With assistance from Takashi Hirokawa, Keiko Ujikane and Toru Fujioka.
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