Economic and Fiscal Policy Minister Kaoru Yosano on Tuesday urged the Bank of Japan to look carefully at the global market and U.S. economy when discussing this week whether to scrap the “zero-interest-rate” policy, while Finance Minister Sadakazu Tanigaki said he did not want the BOJ to raise the rate.
“I want (the BOJ) to examine whether the global market is really stable and how the outlook on the U.S. economy is, right up to the last minute, before making a decision,” Yosano said.
However, the minister has indicated he is ready to accept a rate hike.
The BOJ Policy Board is expected to raise the unsecured overnight call money rate from zero to 0.25 percent per year at its two-day meeting that begins Thursday. It would be the first rate hike in nearly six years.
Tanigaki said separately he is opposed to raising the rate now. He said he thinks it is “desirable” for the central bank to keep short-term interest rates effectively at zero because the economic recovery has caused no market concerns of inflation.
While he acknowledged it is the central bank’s decision to change monetary policy, he said the BOJ still needs to support the economy by maintaining the zero-rate policy to ensure deflation does not return.
“We would like to sustain an economic recovery that involves no inflationary concerns,” the finance minister told a news conference.
“In this sense, I believe it is desirable (for the BOJ) to maintain the zero interest rate.”
Tanigaki would not say whether the government will exercise its right to request a delay in a vote to change the monetary policy if one is called at this week’s meeting.
“We will closely watch developments in the economy and market until the last minute before making a decision” on whether to ask for a vote delay, he said.
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