Japan’s new economy minister, Ryosei Akazawa, has sent a clear message to the Bank of Japan (BOJ), urging them to proceed cautiously with any future interest rate increases. Akazawa, speaking at his first press conference in the role, stated that the government’s top priority is to ensure Japan completely exits from deflation. He emphasized that achieving this goal will require time and careful consideration.
Akazawa, a close ally of Prime Minister Shigeru Ishiba, clarified that Ishiba’s previous statements regarding the need for monetary policy normalization are conditional. The government expects the BOJ to prioritize Japan’s exit from deflation in its decision-making process. Akazawa further emphasized the importance of the BOJ carefully assessing any potential implications before raising interest rates again.
The minister highlighted the government’s commitment to working closely with the BOJ to decisively overcome deflation. This sentiment echoes the BOJ’s own recent stance, as they raised rates in July but maintained a steady policy at their September meeting. The central bank cited global economic uncertainties as a key factor in their decision to pause and assess the situation. Akazawa’s statements suggest that the government and the BOJ are aligned in their approach to managing Japan’s economic landscape, prioritizing the fight against deflation while also carefully navigating the global economic landscape.
