By Leika Kihara

TOKYO (Reuters), – Hitoshi Sushi, a member of Hitoshi’s board, stated that Bank of Japan will seek to strengthen its policy framework to limit the impact of monetary easing. This comes amid concerns about the financial consequences of high interest rates.

Japan’s banking system is stable. Corporate funding pressures have easing. But, any delays in Japan’s recovery might increase the credit cost of financial institutions.

Suzuki spoke in a speech that was delivered on Thursday. He stated, “We will continue looking for room to further enhance our monetary policy through carefully weighing both the effect and cost monetary easing.”

“I believe that we should pay attention to the increasing cost of monetary ease.”

Although Suzuki voted in favor of maintaining BOJ’s huge stimulus programme, the BOJ has been warning of the impact that prolonged low rates will have on the banks’ earnings.

The BOJ refined its monetary policy framework in March to be more sustainable. This included allowing bond yields more flexibility around the 0% target.

Suzuki stated that Japan’s economy will continue to recover, but warned against growth exceeding expectations if Omicron coronavirus strain spreads or supply problems persist.

Suzuki explained that “if the supply constraint’s impact is greater or lasts longer, there may be a risk that economic growth might further underestimate expectations.” Next year.

Japan has fallen behind other advanced countries in economic recovery after the COVID-19 epidemic. This is because Japan was forced to impose a state of emergency on its consumption.

Although there are hopes for a recovery in consumer consumption following the lifting of curbs on Sept. 30, supply shortages and bottlenecks disrupted manufacturing and have weighed heavily on an export-reliant economy.