Japan’s New Economics Minister Asks BOJ to Consider Rate Hikes Carefully
Prime Minister Shigeru Ishiba said he expected the BOJ to maintain accommodative monetary conditions
TOKYO—The Bank of Japan should weigh any additional interest-rate increases carefully in order to avoid the risk of cooling the economy too much, the country’s new economics minister said Wednesday.
“I don’t believe that we have completely overcome deflation at this point, and I still cannot deny the possibility of falling back” into deflation, Ryosei Akazawa, the minister in charge of economic revitalization, said at a news conference.
“As long as I feel this way, we would like the BOJ to share our view that it needs to be cautious about raising interest rates,” he added.
Given that Japan experienced virtually no growth in wages and prices for decades, consumers still don’t believe that prices will continue rising, the minister said.
However, Akazawa isn’t fully opposed to further BOJ rate increases.
“It is not strange to normalize monetary policy if conditions are met,” Akazawa said. Although the BOJ ended negative interest rates in March and raised the policy rate to 0.25%, the level doesn’t look normal yet, he added.
Japan’s new prime minister, Shigeru Ishiba, said late Tuesday that he expected the BOJ to maintain accommodative monetary conditions to help the nation achieve a complete exit from deflation.