BOJ governor warned panel of prolonged loose policy risks, minutes show

TOKYO (Reuters) -Bank of Japan Governor Kazuo Ueda told a meeting of Japan’s top economic panel last week that keeping monetary policy too loose for too long carries risks against achieving its inflation target stably, minutes of the meeting showed on Monday.

The Council on Economic and Fiscal Policy met on November 12 in their first gathering since Prime Minister Sanae Takaichi’s administration took office.

Asked about the BOJ’s rationale for raising interest rates when the underlying inflation rate still lags the BOJ’s 2% target, Ueda said achieving the target sustainably over the longer term meant not only pushing inflation up from below, but also avoiding an excessive overshoot, according to the minutes.

"From this perspective, keeping policy too loose for too long carries risks," Ueda said, according to the minutes.