A Bank of Japan move to raise interest rates at a time when the government is calling on companies to invest more would likely send a mixed message on policy, according to a member of Japan’s ruling coalition.
“We are at a point where we are calling for more investment in the private sector, and such a move could seem like a contradictory measure,” Japan Innovation Party (JIP) co-leader Fumitake Fujita said in an interview on Wednesday, referring to an increase in borrowing costs. “Our basic stance is that restraint needs to be exercised regarding the timing.”
The comments come as investors, BOJ watchers and businesses try to gauge when the central bank will next raise interest rates and whether the formulation of an economic package by new Prime Minister Sanae Takaichi’s Cabinet in the coming weeks might delay that move.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.