Latest news with #ShinichiUchida
South China Morning Post
a day ago
- Business
- South China Morning Post
BOJ should prioritise achieving price stability, deputy governor says
The Bank of Japan should make clear it is not monetising government debt by ensuring that fiscal considerations do not take precedence over its goal of achieving price stability, Deputy Governor Shinichi Uchida said on Saturday. Central banks can theoretically print unlimited amounts of money and completely finance government debt, which poses delicate questions around their huge government bond purchases conducted to revive their economies, Uchida said. Central banks see 'monetising', or directly financing government deficits, as taboo, as doing so risks letting inflation get out of control and potentially eroding their independence. Such unconventional monetary easing steps taken since the 2008 financial crisis present a challenge for central banks across the globe, he said in a speech. The BOJ's monetary easing, for its part, was aimed at achieving its 2 per cent inflation target, and not at funding government debt, Uchida said. 'In considering what constitutes monetary financing or not, the important question is whether monetary policy is compromised by fiscal considerations,' Uchida said.
CNA
2 days ago
- Business
- CNA
BOJ must ensure fiscal considerations don't overtake mandate, deputy governor says
TOKYO :The Bank of Japan should make clear it is not monetising government debt by ensuring that fiscal considerations do not take precedence over its goal of achieving price stability, Deputy Governor Shinichi Uchida said on Saturday. Central banks can theoretically print unlimited amounts of money and completely finance government debt, which poses delicate questions around their huge government bond purchases conducted to revive their economies, Uchida said. Central banks see "monetising," or directly financing government deficits, as taboo, as doing so risks letting inflation get out of control and potentially eroding their independence. Such unconventional monetary easing steps taken since the 2008 financial crisis present a challenge for central banks across the globe, he said in a speech. The BOJ's monetary easing, for its part, was aimed at achieving its 2 per cent inflation target, and not at funding government debt, Uchida said. "In considering what constitutes monetary financing or not, the important question is whether monetary policy is compromised by fiscal considerations," Uchida said. In deploying and rolling back monetary easing, the BOJ must focus on achieving its economic and price mandate. "The result must be that the Bank does not deviate from such policy conduct out of fiscal considerations," he said. "In its future conduct of monetary policy, the Bank should make it clear that it is not engaging in monetary financing." The remarks come against the backdrop of growing pressure from opposition and ruling parties on Prime Minister Shigeru Ishiba to increase budget spending ahead of an upper house election due next month. Some analysts have blamed concerns over Japan's worsening finances for pushing up super-long bond yields to record highs last month, and complicating the BOJ's efforts to taper its huge bond purchases. Under a radical monetary easing programme deployed in 2013, the BOJ increased purchases of government bonds and adopted a policy of capping long-term interest rates around zero. While the BOJ ended the policy last year, its short-term policy rate is still at 0.5 per cent. The central bank plans to lay out in June a new bond tapering plan for fiscal 2026 and beyond as part of its effort to normalise monetary policy.
Reuters
2 days ago
- Business
- Reuters
BOJ must ensure fiscal considerations don't overtake mandate, deputy governor says
TOKYO, June 7 (Reuters) - The Bank of Japan should make clear it is not monetising government debt by ensuring that fiscal considerations do not take precedence over its goal of achieving price stability, Deputy Governor Shinichi Uchida said on Saturday. Central banks can theoretically print unlimited amounts of money and completely finance government debt, which poses delicate questions around their huge government bond purchases conducted to revive their economies, Uchida said. Central banks see "monetising," or directly financing government deficits, as taboo, as doing so risks letting inflation get out of control and potentially eroding their independence. Such unconventional monetary easing steps taken since the 2008 financial crisis present a challenge for central banks across the globe, he said in a speech. The BOJ's monetary easing, for its part, was aimed at achieving its 2% inflation target, and not at funding government debt, Uchida said. "In considering what constitutes monetary financing or not, the important question is whether monetary policy is compromised by fiscal considerations," Uchida said. In deploying and rolling back monetary easing, the BOJ must focus on achieving its economic and price mandate. "The result must be that the Bank does not deviate from such policy conduct out of fiscal considerations," he said. "In its future conduct of monetary policy, the Bank should make it clear that it is not engaging in monetary financing." The remarks come against the backdrop of growing pressure from opposition and ruling parties on Prime Minister Shigeru Ishiba to increase budget spending ahead of an upper house election due next month. Some analysts have blamed concerns over Japan's worsening finances for pushing up super-long bond yields to record highs last month, and complicating the BOJ's efforts to taper its huge bond purchases. Under a radical monetary easing programme deployed in 2013, the BOJ increased purchases of government bonds and adopted a policy of capping long-term interest rates around zero. While the BOJ ended the policy last year, its short-term policy rate is still at 0.5%. The central bank plans to lay out in June a new bond tapering plan for fiscal 2026 and beyond as part of its effort to normalise monetary policy.
Business Recorder
19-05-2025
- Business
- Business Recorder
BOJ to keep hiking rates if economy rebounds from tariff hit, deputy governor says
TOKYO: The Bank of Japan will continue to raise interest rates if the economy rebounds from an expected hit from higher US tariffs, the central bank's deputy governor Shinichi Uchida said, while warning of a highly uncertain outlook. Japan's underlying inflation will stay around the BOJ's 2% target if there is an economic rebound, Uchida told parliament. He noted that recent gains in domestic prices were largely due to higher import costs and increasing food costs, such as for rice. 'We are mindful that such price rises are having a negative impact on people's livelihood and consumption,' he said. 'If our forecast materialises, we will continue to raise our policy rate,' Uchida said. 'But there is extremely high uncertainty over the outlook for each country's trade policy and its fallout. As such, we will determine without pre-conception whether the economy and prices move in line with our forecast,' he added. Japan's economy shrank for the first time in a year and at a faster pace than expected, data for the March quarter showed on Friday, underscoring the fragile nature of its recovery now under threat from US President Donald Trump's trade policies. BOJ upbeat on wages despite US tariffs, sees scope to resume rate hikes Having exited a decade-long stimulus policy last year, the BOJ raised interest rates to 0.5% in January and has signaled its readiness to keep hiking borrowing costs if a moderate economic recovery keeps Japan on track to durably hit its 2% inflation target. But fears of a Trump-induced global slowdown forced the BOJ to sharply cut its growth forecasts at its April 30-May 1 policy meeting, and cast doubt on its view that sustained wage hikes will underpin consumption and the broader economy.
The Sun
19-05-2025
- Business
- The Sun
BOJ to keep hiking rates if economy rebounds from tariff hit, deputy governor says
TOKYO: The Bank of Japan will continue to raise interest rates if the economy rebounds from an expected hit from higher U.S. tariffs, the central bank's deputy governor Shinichi Uchida said, while warning of a highly uncertain outlook. Japan's underlying inflation will stay around the BOJ's 2% target if there is an economic rebound, Uchida told parliament. He noted that recent gains in domestic prices were largely due to higher import costs and increasing food costs, such as for rice. 'We are mindful that such price rises are having a negative impact on people's livelihood and consumption,' he said. 'If our forecast materialises, we will continue to raise our policy rate,' Uchida said. 'But there is extremely high uncertainty over the outlook for each country's trade policy and its fallout. As such, we will determine without pre-conception whether the economy and prices move in line with our forecast,' he added. Japan's economy shrank for the first time in a year and at a faster pace than expected, data for the March quarter showed on Friday, underscoring the fragile nature of its recovery now under threat from U.S. President Donald Trump's trade policies. Having exited a decade-long stimulus policy last year, the BOJ raised interest rates to 0.5% in January and has signaled its readiness to keep hiking borrowing costs if a moderate economic recovery keeps Japan on track to durably hit its 2% inflation target. But fears of a Trump-induced global slowdown forced the BOJ to sharply cut its growth forecasts at its April 30-May 1 policy meeting, and cast doubt on its view that sustained wage hikes will underpin consumption and the broader economy.
