(Reuters) – The Bank of Japan (BOJ) on Friday kept ultra-low interest rates but announced a broad review of its monetary policy, laying the groundwork for new Governor Kazuo Ueda to gradually phase out his predecessor’s massive stimulus programme.
Following are excerpts from the news conference, which was conducted in Japanese, as translated by Reuters:
HIGH UNCERTAINTY SURROUNDS OVERSEAS ECONOMY
“When looking at risks, uncertainty surrounding the overseas economy is extremely high given the war in Ukraine and commodity price developments. We must be vigilant to financial market moves and their impact on Japan’s economy.”
INFLATION TARGET
“Uncertainty regarding domestic and overseas economic and market developments is extremely high. While trend inflation is gradually heightening, it will take some time to achieve our inflation target. As such, the risk of missing our price target with premature monetary tightening is bigger than the risk of experiencing inflation exceeding 2% due to a delayed tightening. The cost of waiting for trend inflation to heighten is low.”
MAINTAIN EASY POLICY FOR NOW
“Many board members believe that inflation will ease below 2% toward the latter half of this fiscal year, then bounce back after that. But the forecast of the rebound is based on various assumptions and bound with uncertainty. As such, I want to be patient here and maintain easy policy a bit longer.”
ON POLICY REVIEW
“We don’t have anything in mind in terms of tying this to a near-term policy tweak.”
(Reporting by Leika Kihara; Editing by Sherry Jacob-Phillips)
