Bank of Japan board member Takako Masai said price growth remained weak in Japan even though growth was solid. And, “as such, the best approach would be to sustain the current ultra-loose monetary policy. With that “the positive momentum is not disrupted,” regarding inflation moving back to 2% target.
She also noted that “Monetary easing can stimulate the economy. On the other hand, prolonged low rates could have adverse effects on bond market functions and financial institutions’ profits”. Thus, “in guiding monetary policy, the BOJ must thoroughly scrutinize the costs and benefits of its policy from various perspectives.”
On BoJ’s move to allow 10-year JGB yield to move from -0.1% to 0.1%, she that “Such flexible measures the BOJ took will help sustain sound market functions.”
