TOKYO – Most Japanese firms want Bank of Japan Governor Kazuo Ueda to focus on financial market stability at his first policy meeting next week, with few seeing benefits from any easing of its ultra-loose monetary policy, a Reuters monthly poll showed.
Ueda has so far signalled his intent to maintain those loose conditions, despite telling parliament this week that Japan was still on course to reach the central bank’s 2 percent core inflation target.
Of nearly 500 major companies polled, 52 percent said they hoped for financial stability measures, with a third saying Ueda should maintain the policies of his predecessor, Haruhiko Kuroda.
“Markets are volatile, so its desirable for the new board to uphold the stability of the old one,” a representative from an electrical machinery maker said, on condition the company wasn’t identified.
That corporate caution comes after the International Monetary Fund cut its global economic growth outlook for 2023 as it warned of a risk posed by a possible severe flare-up of financial system turmoil, saying that nervous investors could try to test the “next weakest link” in the financial system following the Swiss government-engineered rescue of Credit Suisse.
Slightly less than a quarter of the Japanese firms surveyed by Reuters said they wanted a revision of the BOJ’s negative interest rate policy, down from nearly a half two months ago when Ueda was nominated to his post.
Fewer companies also urged the central bank to revise its inflation target, down to 16 percent from 28 percent of those polled in February.
