By Leika Kihara
TOKYO (Reuters) -Bank of Japan (BOJ) board member Naoki Tamura said on Wednesday the central bank must proceed slowly but steadily toward normalising its ultra-loose monetary policy.
“In my view, the central bank’s ultimate goal is to bring interest rates back to levels where they can be pushed up or down to adjust demand, and influence price moves,” Tamura said in a speech.
The BOJ ended eight years of negative interest rates and other remnants of its unorthodox policy last week, making a historic shift away from its focus on reflating growth with decades of massive monetary stimulus.
While the BOJ overhauled its monetary policy framework, the side-effects of prolonged easing will remain as short-term interest rates are still stuck around zero and long-term rates are not yet driven fully by market forces, Tamura said.
“How to manage monetary policy ahead is very important to ensure we deftly roll back our massive stimulus programme, and move slowly but steadily toward policy normalisation,” he said.
A former commercial bank executive, Tamura is considered by markets as among hawkish members of the board. He voted for last week’s decision to end negative rates.
(Reporting by Leika Kihara; Editing by Christopher Cushing)
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