Despite growing speculation that the Bank of Japan will shift from its decadelong aggressive easing after its leadership change, new Gov. Kazuo Ueda seems to be in no rush to make any changes after he reiterated the importance of maintaining monetary stimulus on Monday.

Appearing at his inaugural news conference, Ueda said he will not quickly move to adjust some policy measures seen as problematic, including the so-called yield curve control (YCC) program.

“We will be continuing the current easy monetary policy,” said Ueda, who began his five-year term Sunday, adding that the target of stable and sustainable 2% inflation backed by healthy wage hikes will remain unchanged as well.

While former Gov. Haurhiko Kuroda had aimed to realize the 2% inflation target within two years of taking charge in 2013, the goal has remained elusive over the past decade.

“I cannot tell you a certain time frame to achieve the 2% target, since it is not an easy task,” Ueda said.

Although Ueda faces mounting pressure to untangle some aspects of his predecessor’s complex legacy, the new governor is apparently playing it safe for now by carefully communicating with markets.

Ueda has said that he intends to make his intentions explicit, and his comments at his first news conference were in line with that, Toru Suehiro, chief economist at Daiwa Securities, wrote in a report on Tuesday.

Given that market players had doubts about the trustworthiness of Kuroda's comments due to a number of surprises that emerged during his tenure, “it seems Ueda is trying to improve communication,” Suehiro said.

While Ueda has outlined a commitment to continuing ultraeasy policy, he has also acknowledged some side effects of Kuroda's monetary stimulus.

One issue under the spotlight is the YCC — a strategy of buying up Japanese government bonds (JGBs) in order to control long-term interest rates at around 0% — along with a negative interest rate policy.

The BOJ’s massive purchasing of JGBs has impaired bond market functions, and experts have pointed out that the policy is not sustainable.

In December, the BOJ surprised market participants by modifying the YCC policy to allow long-term yields to swing plus and minus 50 basis points, compared with the previous range of 25 points in either direction.

Although the move was seen as an effective rate hike, Kuroda explained that it was intended to fix bond market distortions. But the impairment of market functions apparently worsened, as the BOJ’s quarterly survey to measure the healthiness of the JGB market in February showed that it had hit its worst level.

However, Ueda said it is “appropriate to maintain the current YCC program given the economic, price and financial circumstances now,” adding that he will also keep the negative rate policy.

Suehiro said Ueda will avoid taking unnecessary risks, so “I think tweaks of the massive easing will be introduced very gradually.” He expects the BOJ will likely keep the YCC until the second half of this year and won’t touch the negative rate policy until next year.

As for whether Ueda will conduct a comprehensive review of the pros and cons of Kuroda’s ultraloose policy, the new governor mentioned that his team may look to do an overhaul of not just the past decade of monetary policy but also the BOJ's overall policy going back over two decades.

While Japan was unable to see a healthy cycle of price and wage hikes over the past decade, the situation may be changing.

Soaring commodity prices and a weak yen have jacked up import costs, pushing up the inflation rate over the past year. This has finally prompted a number of firms — many of which had been haunted by a deflationary mindset — to raise prices and pay.

This year’s spring wage negotiations between management and labor, known as shuntō, saw many firms introduce historic wage hikes.

According to the Japanese Trade Union Confederation, better known as Rengo, the average pay raise among 2,484 unions affiliated with the organization was 3.7%, the highest in about three decades.

“The result of shuntō so far is pleasing, but we need to see if this (wage hike) trend is here to stay,” Ueda said.

As for how the recent banking crisis overseas could affect Japan, Ueda said it’s unlikely that Japan will be hit hard, since domestic banks have enough capital and liquidity.

The inaugural news conference was also attended by the two new deputy governors: Shinichi Uchida, former BOJ executive director, and Ryozo Himino, former head of Japan’s financial watchdog.

The first policy meeting under Ueda is scheduled to be held on April 27 and 28.