SENDAI, MIYAGI PREF. –
Finance Minister Satsuki Katayama on Saturday effectively signaled acceptance of an anticipated interest rate hike by the Bank of Japan.
“There is no major disagreement between us and the BOJ,” Katayama said in a speech in Sendai, Miyagi Prefecture. “I thought I should say this since reports have been circulating.”
The Japanese central bank is reportedly likely to raise its policy interest rate to around 0.75% from around 0.5% at present at its two-day monetary policy meeting through Friday this week.
According to a recent Bloomberg survey of 50 analysts, all forecast that the central bank will raise its policy rate at the meeting.
The stance of Prime Minister Sanae Takaichi’s Cabinet on monetary policy is seen as a key factor for the BOJ to hike rates. Takaichi is known for her pro-monetary stimulus stance, but she has toned down her rhetoric and pressure on the BOJ since she took the helm in October.
One possible factor that the Takaichi’s Cabinet effectively accepted a rate hike is the prolonged weakening of the yen, which has been a major source of Japan’s high inflation. Takaichi has pledged to tackle the issue of price increases.
The BOJ has been sitting still since it raised rates in January, mainly due to the economic uncertainties driven by the U.S. tariff policy.
In his speech earlier this month, BOJ Gov. Kazuo Ueda said that the negative impact of U.S. tariffs on the Japanese economy has not been that apparent so far. The governor signaled that the bank will possibly increase rates this month.