MNI BRIEF: BOJ's Ueda Says To Consider No More Than YCC Tweaks

New Bank of Japan Governor Kazuo Ueda on Monday brushed aside any suggestion of anything more than tweaks to yield curve control as he maintains easy policy settings and bids to achieve the 2% inflation target within his five-year term.

While the BOJ will carefully monitor economic conditions, Ueda said it was appropriate to maintain rates at negative levels and that the impact on financial institutions is limited.

“Powerful easy policy is mainly based on the negative interest rate policy. While the negative rate policy has a depressing impact on banks’ profits, financial intermediation is working smoothly,” Ueda said, downplaying the impact of recent financial volatility overseas though he added that any concern over banks’ interest rate exposure will not impede the implementation of monetary policy.

However, Ueda didn’t rule out possible tweaks to yield curve control, saying he will decide on whether to review the policy framework after discussions with other board members. (MNI INTERVIEW: BOJ Won't Move On YCC Before July - Sakurai)

“I will make policy judgments in a logical manner and explain the thinking behind them carefully,” said Ueda, 71, who was appointed governor earlier in the day. The former academic’s theoretical knowledge helped introduce zero-interest rate policy in an earlier stint at the BOJ from 1998-2005.