Incoming BOJ chief says low rates remain appropriate - for now

"It's standard practice to act preemptively to demand-driven inflation, but not respond immediately to supply-driven inflation," Ueda"Japan's trend inflation is likely to rise gradually. But it will take some time for inflation to sustainably and stably achieve the BOJ's 2% target," he said.

With inflation exceeding the BOJ's target, Ueda faces the delicate task of phasing out YCC, which has drawn public criticism for distorting market functions and crushing banks' margins. Ueda's caution against shifting policy too soon was echoed by Shinichi Uchida, a career central banker and the government's deputy BOJ governor nominee, who said it was inappropriate to tweak ultra-loose policy just to deal with its side-effects.

In phasing out stimulus, the BOJ would do so by raising interest rates on financial institutions' reserves parked with the central bank rather than selling bonds, Ueda said.

Swimming in a river in North Queensland is a short duration and very exciting activity. I did it lots when I was a kid. I'd be genuinely afraid to do it now.

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