Bank of Japan Governor: "Monetary Easing to Continue... Need to Watch if the Virtuous Cycle Strengthens"

Bank of Japan Decides to Maintain Monetary Policy at Policy Meeting
Inflation Target Sees "Increased Certainty"

On the 19th, the Bank of Japan, Japan's central bank, indicated that it has no intention of changing its financial easing policy for the time being, despite forecasts that Japan might soon lift its negative interest rate policy early.

According to Japanese media such as NHK and Nihon Keizai Shimbun, Kazuo Ueda, Governor of the Bank of Japan, stated at a press conference following the Bank of Japan's Monetary Policy Meeting that "(at this meeting) I told the same members that we will persistently continue financial easing."

Earlier, Governor Ueda had remarked in the House of Councillors that "the situation will become more challenging from the end of this year through next year," leading to speculation that Japan might change its financial and monetary policies.

Regarding the intention behind that statement, Governor Ueda explained, "I received questions about future responses in the Diet, and I said it with the thought of strengthening our resolve in the second year."

Governor Ueda said, "I still believe it is necessary to observe whether the virtuous cycle of wages and prices is strengthening."

However, concerning the "stable 2% inflation rise," which is considered a condition for lifting the negative interest rate, Governor Ueda said, "The certainty is gradually increasing."

Kazuo Ueda, Governor of the Bank of Japan
Photo by Yonhap News

At the final Monetary Policy Meeting of this year held on the same day, the Bank of Japan decided to maintain the short-term interest rate at -0.1% and continue its large-scale financial easing policy by guiding the 10-year government bond yield, a long-term interest rate indicator, to around 0%.

At the previous Monetary Policy Meeting held in October, the Bank of Japan eased its policy slightly for the third time since the end of last year by raising the upper limit target for fluctuations in the 10-year government bond yield from 0.5% to 1%, while allowing some exceedance of 1% depending on market conditions. However, this time, no adjustments were made.

This content was produced with the assistance of AI translation services.