Ueda Appointed Governor of Bank of Japan... Is the 'Zero Interest Rate' Ending?

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

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Kazuo Ueda, Governor of the Bank of Japan, took office on the 9th.

According to Kyodo News on the same day, Governor Ueda is expected to express his intention to maintain the large-scale monetary easing policy upheld by his predecessor, Haruhiko Kuroda, for the time being during his inauguration press conference on the 10th.

Earlier, Governor Ueda appeared before the National Diet in February and stated that it "still takes time" for the economy to achieve a virtuous cycle with a 2% inflation rate, adding, "We will continue monetary easing to firmly support the economy and create an environment where companies can raise wages."

However, he also acknowledged that the prolonged large-scale monetary easing, which keeps interest rates low, has caused "various side effects," and expressed his intention to devise necessary measures to curb these side effects.

Last year, while major countries such as the United States and Europe aggressively raised interest rates to stabilize soaring inflation, the Bank of Japan maintained large-scale monetary easing characterized by 'zero interest rates,' which led to a sharp decline in the yen and increased market turmoil.

For Governor Ueda, a key challenge during his five-year term is to find an exit from large-scale monetary easing and restore monetary policy to its original form.

There is also analysis suggesting that at the Bank of Japan's Monetary Policy Meeting on the 27th-28th of this month, which Governor Ueda will attend for the first time, a decision may be made to raise or abolish the 0.5% cap on long-term interest rates.

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