by Leika Kihara and Tetsushi Kajimoto
TOKYO (Reuters) – Kazuo Ueda, the Japanese government’s nominee to succeed Haruhiko Kuroda as central bank (BoJ) governor, said on Friday that maintaining the BoJ’s ultra-accommodative monetary policy was appropriate.
According to Kazuo Ueda, the rise in inflation in Japan is mainly due to rising import costs and commodity prices, rather than strong domestic demand.
He also warned that uncertainties regarding the country’s economic recovery remained “very high”, justifying the continuation of the BoJ’s ultra-accommodative monetary policy.
“It is common to act preemptively in the face of demand-driven inflation, but not to respond immediately to supply-driven inflation,” Kazuo Ueda said during his hearing before the Japanese parliament.
“Inflation is likely to rise gradually, but it will take some time to sustainably and stably reach the BoJ’s 2% target,” he added.
“It is true that various side effects arise from stimulus measures, but the current BoJ policy is necessary and appropriate to achieve 2% inflation.”
If his appointment is approved by Parliament, Kazuo Ueda will succeed Haruhiko Kuroda, whose term ends on April 8, as head of the Japanese central bank.
(Reporting by Leika Kihara; Additional reporting by Tom Westbrook in Singapore; Editing by Sam Holmes)
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