Bank of Japan nominee Ueda reiterates the need to maintain monetary easing

The government's nominee for Bank of Japan governor has expressed in an Upper House hearing that the current monetary policy should be maintained, saying the benefits outweigh the drawbacks. He said much the same thing in a Lower House hearing last week.

Economist Ueda Kazuo was speaking at a confirmation hearing of the Upper House steering committee on Monday.

In a question-and-answer session, Ueda was asked about how he evaluates "Abenomics" -- an economic policy introduced under the former Prime Minister Abe Shinzo. The policy includes monetary easing, fiscal stimulus through government spending and structural reforms.

Ueda noted that Abenomics allowed the central bank and the government to jointly implement necessary policies, resulting in the creation of an environment that was not deflationary.

He said Abe's policy has steadily produced positive outcomes, including expanding employment through such measures as work-style reforms.

Asked whether he intends to continue Abenomics, Ueda said he would maintain it with a view to achieving an inflation rate of 2 percent in a sustainable and stable manner.

He was also asked about the effectiveness of the central bank's ultra-easy monetary policy.

Ueda noted that policies always bring both benefits and drawbacks. He said he needs to weigh both to determine the most appropriate measure.

He went on to say that he believes the benefits of the current monetary easing outweigh the drawbacks.

Referring to an exit strategy from the current ultra-loose monetary policy, Ueda said he would adopt such a strategy only when BOJ's prospects for achieving the 2-percent inflation target come into view.

But he said how best to implement the strategy depends on the future economy and prices. He added that he would refrain from making specific comments at this point.