It’s not yet the time to consider an exit from the Bank of Japan’s ultraloose monetary policy, said Hiroshige Seko, the ruling Liberal Democratic Party’s Upper House secretary-general.
Any revamp to the decade-old inflation accord between the government and the central bank would be disruptive for markets, said Seko, a senior member of the political faction that was led by former Prime Minister Shinzo Abe. "There’s no reason to change it,” he said during an NHK talk show on Sunday.
The Bank of Japan is in the middle of leadership transition, with Kazuo Ueda set to take over from Haruhiko Kuroda, who sought to reach the 2% inflation goal by pouring stimulus into the financial system. Recent testimony by Ueda in parliamentary hearings suggests that he will stick to the same course for monetary policy and work to ensure a smooth continuation of policy as governor.
"It is my understanding that Mr. Ueda will continue with the Bank of Japan’s current stance,” Seko said.
Ueda said last week that the benefits of the central bank’s stimulus outweighs its side effects, a sign that he isn’t seeking a quick move away from a decade of massive easing when he assumes his role in April.
Kuroda is set to hold his last policy meeting at the central bank on Friday.
Asked about rising prices, fueled by higher energy costs and lingering disruption to supply chains, Seko said that his party plans to put forth a package of measures worth as much as ¥5 trillion ($36.8 billion) by March 17.