Japan PM meets new BOJ governor in pursuit of policy continuity

Prime Minister Fumio Kishida met with new Bank of Japan governor Kazuo Ueda on Monday, the first business day of the former academic's term at the helm of the central bank that has overseen a decade of unprecedented monetary easing.

Kishida and Ueda are expected to confirm the government and BOJ will continue working closely to achieve economic growth and stable inflation with the central bank expected to maintain its accommodative monetary policy.

The government and the BOJ have a 2013 joint accord under which the central bank pledged to attain its 2 percent inflation target "at the earliest possible time." Critics are calling for a review to make the target more flexible, but Ueda has said he does not see the need to revise the agreement.

Kishida's choice of Ueda surprised many, but the selection was made based on the renowned economist's experience and expertise -- qualities that are highly valued when myriad challenges await the central bank.

The BOJ is expected to retain monetary easing to support the economy, particularly wage growth, to meet the inflation target in a stable manner.

When the time comes, Ueda will have to consider how to normalize monetary policy and communicate the shift to financial markets in a way that minimizes potential shocks.

Kishida has emphasized the need for wealth redistribution while urging companies to step up wage hikes to keep pace with accelerating inflation.

Ueda studied economics at the Massachusetts Institute of Technology and taught at the University of Tokyo. As a member of the decision-making board at the BOJ between 1998 and 2005, he witnessed the central bank's foray into uncharted territory with a zero interest rate and quantitative easing.

He is scheduled to hold his first press conference as governor later Monday.

Ueda's predecessor Haruhiko Kuroda saw his 10-year stint end on Saturday. He defended the powerful monetary easing under his tenure as having brought more benefits than downsides to the economy including Japan defeating deflation.

© Kyodo News