On the 14th of this month, the government submitted to the Diet a plan to appoint economist Kazuo Ueda, a former deliberative committee member of the Bank of Japan, to succeed Kuroda as Governor of the Bank of Japan.



On the 24th of last week, three candidates for the governor and vice-president were interviewed and questioned at the House of Representatives Operational Committee. A hearing and question-and-answer session will be held.



We will provide a quick report on Mr. Ueda's beliefs and the exchange of questions.

Mr. Kazuo Ueda Biography

Bank of Japan governor Kazuo Ueda is 71 years old.


He is one of Japan's leading economists in the fields of macroeconomics and monetary theory.



After graduating from the Faculty of Science at the University of Tokyo in 1974, he pursued research activities at the graduate school of the Faculty of Economics.


He studied at the Massachusetts Institute of Technology Graduate School in the United States and obtained his Ph.D.


In 1993 he became a professor of economics at the University of Tokyo.


For seven years from 1998, he served as a deliberative committee member of the Bank of Japan, providing theoretical support for the introduction of the "zero interest rate policy" and the "quantitative easing policy."



After that, he returned to the university as a professor at the University of Tokyo Graduate School of Economics.


Since 2017, he has been a professor at Kyoritsu Women's University.



He is also active outside the university, where he is an outside director of the Development Bank of Japan and a special advisor to the Bank of Japan Institute for Monetary and Economic Studies.

today's schedule

This is the schedule for today's meeting of the House of Representatives Steering Committee.



The policy hearing will begin shortly after 1:00 p.m., and Mr. Ueda, the presidential candidate, will give his opinion.


Later in the evening, we will be taking questions from members of each party.



The House of Councilors is scheduled to hold opinion hearings on two candidates for the position of Vice Governor, Shinichi Uchida, a member of the Board of Japan, and Ryozo Himino, former Commissioner of the Financial Services Agency, on the 28th.

[Remarks at the hearing of the House of Representatives What is the point?

]

What kind of remarks did Ueda make at the policy hearing and question-and-answer session held at the House of Representatives Steering Committee on the 24th of last week?



Summarized by main points.

1: Will large-scale monetary easing continue?

The current large-scale monetary easing that continues under Governor Kuroda.


Mr. Ueda indicated his intention to continue this and aim to achieve the price target of 2%.

"There are various side effects, but given the economic and price situation, I believe that this is a necessary and appropriate method for achieving the price stability target of 2%. I would like to use this five-year period to carry on the mission of achieving price stability, which has been an issue for many years, and put the finishing touches on it.”

2: Price Outlook and Timing of Achieving the 2% Price Target

He indicated that achieving the price stability target of 2 percent would still take some time.



"Currently, Japan is in a state of extremely high uncertainty regarding domestic and foreign economies and financial markets. The rate of increase in consumer prices is expected to fall below 2 percent through the middle of fiscal 2023.



" We believe that it will take time to achieve 2% of

3: Should we review the joint statement that includes the 2% price target?

He indicated that there was no immediate need to revise the joint statement by the government and the Bank of Japan that aims to achieve the price stability target of 2% as soon as possible.



"Since 2013, the government and the Bank of Japan have implemented the necessary policies, and the Japanese economy has steadily improved. In the meantime, wages have risen and prices have continued to fall. Deflation has ceased to exist. In this sense, I believe that policy coordination between the government and the Bank of Japan has steadily produced results.

4: Modification of "yield curve control"

He suggested that the current framework of "yield curve control," in which monetary easing measures are implemented by setting operating targets for long-term and short-term interest rates, may be revised in the future.



“Since December last year, the Bank of Japan has adopted various measures with the intention of mitigating side effects as much as possible, and I believe that we are currently at the stage of observing the effects of these measures. I would like to refrain from doing so at the moment, but I would like to take time to discuss and decide on the desired form.”

5: How to handle ETF = exchange traded funds

Regarding the issue of how to handle exchange-traded funds (ETFs), which are created by collecting a large number of stocks purchased under large-scale monetary easing measures, it is a big problem, but it is too early to show a concrete response at this point. I showed the idea that



“What we will do with the things we bought in large quantities is a big problem, and when the exit is approaching, we have to think about it concretely. I just said,

6: Timing and method of exit strategy

When asked about the so-called exit strategy to reduce monetary easing, he avoided mentioning the specific timing and methods.

“When the underlying inflation rate is expected to reach 2%, we will return to the normal state of the various strong monetary easing measures that we are currently adopting. At this point, I would like to refrain from giving specific answers about what it means, when and in what order the situation will be normalized.”

7: Dialogue with the market

He said that dialogue with financial markets is extremely important, and that he wants to minimize "surprises" for the markets.



"I believe that dialogue with the market is extremely important. I believe that it is extremely important to transmit information in an easy-to-understand manner about the central bank's views on economic and financial conditions and its policy conduct.



" Depending on the situation, it is inevitable that there will be surprises, but even in that case, I think it is possible to keep such surprises to a minimum by explaining the way of thinking in simple terms.”

8: What is your ideal monetary policy?

He indicated that he would like to make appropriate policy decisions in line with economic trends, rather than thinking about magical monetary policy.



“My mission is not to come up with and implement a magical, special monetary easing policy. ”