Looking ‘very carefully’ at US and European monetary policy: BOJ Ueda

Washington (Jiji Press) – Bank of Japan Governor Kazuo Ueda said Wednesday that the BOJ is watching monetary policy in the United States and Europe “very carefully” when predicting economic and price developments in Japan.

Changes in monetary policy in other countries can sometimes have “significant effects” on Japan’s economy and inflation, he said at an event held by the International Monetary Fund in Washington.

His comments came as the BOJ has started raising interest rates while central banks in the United States and Europe are easing monetary policy.

“We have been concerned in recent months about what could happen to the U.S. economy going forward,” Ueda said, noting that U.S. employment numbers are “in flux” and that the BOJ therefore “has yet to determine what the medium-term trend is” for the largest economy in the world.

Stock prices saw wild swings after the BOJ Policy Board decided to hike interest rates in late July. On this, Ueda said: “I could say that there was a period in July when there was no communication, explicit or formal communication, between board members and the market or the media.”

“It still takes time before we can sustainably reach 2 percent inflation (in Japan),” Ueda said.