Future Bank of Japan Deputy Governor Shinichi Uchida dismissed the possibility of a short-term revision of the extremely loose monetary policy on Tuesday, saying any policy revision could take about a year.
Uchida said the central bank should not change its extremely loose monetary policy just to address the side effects of prolonged stimulus, such as market disruptions caused by massive interventions to protect the yield threshold.
“The Bank of Japan should continue monetary stimulus,” said Uchida, speaking in the Japanese upper house. will help to continue stimulating,” he added.
If the BOJ needs a full policy overhaul, it could take anywhere from one to a year and a half, as evidenced by the experience of the US and European partners, Uchida said.
“Any such review is best done from a broad perspective, looking at various factors,” he added.
Bank of Japan candidate Kazuo Ueda said on Monday that it would take the central bank a long time to review its policies.
With inflation above its 2% target, markets expect the Bank of Japan to rethink its yield curve management (YCC) policy when Ueda replaces Haruhiko Kuroda as governor in April.
Bank of Japan Governing Council member Naoki Tamura is openly urging the central bank to revise its 2% inflation target and extremely loose policy, as a prolonged period of low interest rates is hurting the profitability of financial companies.