Finance Minister Sadakazu Tanigaki urged the Bank of Japan on Friday to gauge the market’s reaction to the North Korean missile tests before making a decision on interest rates next week.
To support the economic recovery, Tanigaki has repeatedly urged the Bank of Japan to refrain from Japan’s first interest rate hike in six years.
The BOJ Policy Board is is widely expected to up interest rates at the July 13-14 meeting.
“It’s necessary for the Bank of Japan to thoroughly debate how the recent missile tests may affect the markets and then carefully make a judgment,” Tanigaki said.
Tokyo stocks finished flat Friday after losing ground the previous two days over concerns about U.S. interest rates and North Korea’s seven missile tests early Wednesday.
Tanigaki’s message conflicts with comments made Thursday by Chief Cabinet Secretary Shinzo Abe, who said there was no need for the central bank to analyze the effect of the missile tests.
Abe, who is not an economist, also reckoned the launches would have no impact on the economy.
But nervousness about the possibility of war erupting in Asia, one of the world’s most dynamic hot spots, could dampen market sentiment and impact the global economy.
Tensions in the area have reached new heights, with South Korea and Japan verging on another maritime confrontation, North Korea hinting more missile tests, the United States threatening to shoot them down, and Taiwan announcing plans for missile tests of its own.
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