DIAGNOSIS: Debris or manufacturing tolerance has caused the 5-way joystick to bind. It is a mechanical issue.
FIX: Power off the monitor. Use a can of compressed air with the thin straw attachment. Blast air directly into the seam around the base of the joystick while moving the joystick in all directions.
IF THAT DIDN'T WORK: The joystick module itself may be defective. You can navigate the OSD using the 'ASUS DisplayWidget' software from your PC via USB upstream connection as a workaround.
HEADS UP: Do not force the joystick or try to lubricate it. Forcing it can shear the internal plastic posts. This is a warranty repair.