New BOJ’s Governor in No Rush to Shift Policy, Seeing Appropriateness in Ultra-Low Rates

The next Bank of Japan (BOJ) Governor Kazuo Ueda stated on Friday that the central bank’s ultra-low interest rates are appropriate to support the fragile economy, while giving a warning of the dangers of responding to cost-driven inflation with monetary tightening.

His comment gave a signal that the new chief of BOJ is in no rush to overhaul the controversial policy, while saying that there is a chance the central bank will make a move on the bond yield curve control, but BOJ needs to work out the right timing and means to do so.

He also noted that the outlook of Japan’s economy was highly uncertain as current inflation that elevated at a high level was prompted by rising raw import costs, rather than strong demand.