The Bank of Japan must watch both the costs.....>

BOJ: The Bank of Japan must watch both the costs and benefits of the aggressive

monetary easing it has been conducting since April 2013, BOJ board member Takako

Masai said Wednesday. In a speech to business leaders in Kobe City, western

Japan, Masai also said the central bank needs to keep real interest rates at low

levels in order to stimulate economic activity and guide low inflation, still

below 1%, to a stable 2%.

- Masai did note that "on the other hand, since it has been nearly five years

since the quantitative and qualitative monetary easing was introduced, we must

carefully watch both its effects and side-effects." She didn't say what

side-effects the BOJ needs to monitor but other board members have said keeping

super-low interest rates too low is squeezing profit margins for lenders, which

could hurt the financial intermediation function, an allusion to the "reversal

rate" mentioned by BoJ policy makers last week.

- The reassuring comments have supported JGB futures, last at 150.88, flat on

the session but down since the Tokyo open.