Bank of Japan board member Toyoaki Nakamura said on Wednesday it was premature to change the central bank’s ultra-loose monetary policy now, stressing the need to shore up a fragile economy with massive stimulus.
While prolonged ultra-low interest rates are weighing on financial institutions’ performance, the benefits of the Bank of Japan’s stimulus remain outweighed costs, Nakamura said.
“It is premature to change monetary policy now,” as recent increases in inflation were mainly due to commodity costs and not higher service prices, Nakamura told a news conference.
“The key point is whether inflation can continue to rise sustainably,” Nakamura said, adding that he is not yet convinced inflation will exceed the Bank of Japan’s 2% target in the next fiscal year.
The remarks came after Bank of Japan board member Naoki Tamura said in a newspaper interview last week that the central bank should carry out a review of its monetary framework that could lead to an ultra-loose monetary policy tightening.