Bank of Japan Governor Kazuo Ueda attends a press conference after its policy meeting, in Tokyo, Japan, September 19, 2025. REUTERS/Manami Yamada

TOKYO (Reuters) -Bank of Japan Governor Kazuo Ueda told the nation's top economic panel last week that keeping monetary policy too loose for too long could pose risks to achieving the BOJ's inflation target stably, minutes of the meeting showed on Monday.

The Council on Economic and Fiscal Policy, which sets Japan's long-term fiscal blueprint and policy priorities, met on November 12 in its first gathering since Prime Minister Sanae Takaichi took office.

Asked by a private-sector member about the BOJ's rationale for raising interest rates when underlying inflation lags its 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. "Our approach is to aim for a level that ensures a smooth landing, while carefully assessing conditions as we guide policy," he added.

The question for Ueda came from former BOJ Deputy Governor Masazumi Wakatabe, an advocate of former Prime Minister Shinzo Abe's "Abenomics" stimulus, who now serves as one of the panel's four private-sector members.

The meeting marked the first public occasion where Ueda and Takaichi appeared together since Takaichi took office, though the minutes showed no direct exchanges between the two.

At the end of the meeting, Takaichi stressed that the government would work with the BOJ to revitalise the economy.

"It is extremely important that appropriate monetary policy management be carried out to achieve both future economic growth and stable price increases," Takaichi told the meeting.

(Reporting by Makiko Yamazaki; Editing by Tom Hogue and Muralikumar Anantharaman)