Incoming BoJ Depty Gov Himino: Focus now should be on keeping easy policy to support economy


Incoming Bank of Japan (BoJ) Deputy Governor Ryozo Himino is testifying before Japan’s parliament Upper House on Tuesday.

Key quotes

Minus interest rate policy has negative impacts on financial institutions’ profits.

Must be mindful of negative impact on banks from minus rate but focus now should be on keeping easy policy to support economy.

Need to consider various scenarios on exit from stimulus and come up with measures to respond to them.

If conditions fall in place for BoJ to exit easy policy, that will be good for both the public and banks.

Steering smooth exit from easy policy important, must think of various scenarios.

Best approach is to support economy with easy policy until inflation can achieve boj’s price target excluding impact of import price rises.

Must debate specifics of exit policy only when stable, sustained achievement of boj’s price target comes into sight.

Specific debate on exit from stimulus should be held when achievement of inflation target stably and sustainably becomes in sight.

BoJ may need to prepare with various scenarios in mind, but actual exit details should be decided taking into account economic conditions at the time.

Must carefully monitor how import prices affect trend inflation.

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