(Reuters) – Japan’s new central bank governor Kazuo Ueda assumed office this week, succeeding Haruhiko Kuroda, and delivered his first press conference in the role on Monday, along with his two deputies, Shinichi Uchida and Ryozo Himino.
Following are excerpts from the news conference, which was conducted in Japanese, as translated by Reuters:
BOJ GOVERNOR UEDA ON FINANCIAL STABILITY
“Achieving financial system stability is a big responsibility for the BOJ. As the environment surrounding Japan’s banking system becomes more severe, it’s extremely important to ensure Japan’s financial intermediation is functioning smoothly.”
IMPACT OF THE U.S., EUROPEAN BANKING CRISIS ON JAPAN ECONOMY
“I don’t think it will have a big impact on Japan’s economy for the time-being. But we will carefully watch developments.”
BOJ’S MONETARY EASING TRAJECTORY
“The BOJ’s current monetary easing is a very powerful one. We need to strive, as we have done so far, to appropriately grasp economic, price and financial developments to see whether trend inflation will stably and sustainably achieve 2%. If achievement can be foreseen, we might need to normalise monetary policy. If not, we may need to come up with a more sustainable framework with an eye on the side-effects of monetary easing.”
SHOULD THE BOJ TWEAK YIELD CURVE CONTROL SOON?
“When looking at current economic, price and financial developments, it’s appropriate to maintain YCC for now.”
TO CARRY FORWARD KURODA’S MASSIVE STIMULUS
“Yes, we will maintain the previous leadership’s massive stimulus.”
THE BOJ WILL ATTEMPT 2% INFLATION WITHIN SET TIME-FRAME
“As in the joint statement, the BOJ will seek to achieve 2% inflation at the earliest date possible. But it isn’t necessarily the case that Japan can achieve the price target regardless of economic conditions. When there’s adverse external shocks, it could become difficult … As such, I don’t think the inflation target can be achieved at a set time-frame.”
ON MASSIVE CHANGES TO THE YCC “Whether to make big changes to yield curve control should be decided by looking at economic, price and financial trend. With this in mind, the BOJ must also weigh the benefits and costs of YCC.”
DEPUTY GOVERNOR HIMINO ON OVERSEAS COUNTERPARTS
“Japan’s financial system is stable as a whole, and has sufficient buffers to weather shocks. But we’ve seen hidden vulnerabilities emerge overseas. I hope to engage in close dialogue with financial institutions, and strive to coordinate closely with overseas counterparts.”
DEPUTY GOVERNOR UCHIDA ON MONETARY FRAMEWORK
“There are views the BOJ’s monetary framework has become complex. But technical aspects-wise, we are able to cope sufficiently. What’s most important is to make accurate judgment on developments and carefully time the most appropriate policy move.”
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