Japanese Finance Minister Predicts Rise in Interest Rates
Finance Minister’s Outlook
Japanese Finance Minister Shunichi Suzuki recently shared his perspective on the country’s economic future. He anticipates a potential increase in interest rates and the subsequent impact on various aspects of the economy. In an interview published on Saturday, he expressed his views on the matter.
Interest Rates and Monetary Policy
Suzuki emphasized that while the Bank of Japan governs monetary policy, there will come a time when interest rates will surge. He acknowledged the authority of the central bank in this regard, suggesting an impending shift in interest rates.
Impact on Currency
Regarding the yen, Suzuki highlighted the differing effects of its fluctuations on Japan’s exporters and import-reliant companies. He refrained from stating a preference for a weak or strong yen, acknowledging the pros and cons associated with each scenario.
Expectations and Speculations
With inflation surpassing the Bank of Japan’s 2% target, market players anticipate the cessation of the negative interest rate policy by April. Despite recent recession indicators, sources suggest that the central bank is on track to implement this change.
Efforts to Stimulate Growth
In a bid to revitalize growth and achieve the 2% inflation target, the Bank of Japan has maintained short-term interest rates at -0.1% and the yield around 0% since 2016.
As part of efforts to reflate growth and fire up inflation to its 2% target, the BOJ has been keeping short-term interest rates at -0.1% and the yield around 0% since 2016.
Sources have told Reuters the BOJ is on track to end negative rates in coming months despite recent data showing the economy slipped into recession, though weak domestic demand means it may seek more clues on wages growth before acting.
With inflation having exceeded the Bank of Japan’s 2% target for some time, many market players expect the central bank to end its negative interest rate policy by April.
On the yen, Suzuki said there were pros and cons to its moves that have varying effects on Japan’s exporters and firms reliant on imports. He declined to comment on whether a weak yen, or a strong yen, was desirable for the economy.
“The Bank of Japan holds jurisdiction over monetary policy. But there will be a phase when interest rates go up,” Suzuki was quoted as saying in the interview.
TOKYO (Reuters) -Japanese Finance Minister Shunichi Suzuki said there will likely come a time when the country’s interest rates will begin to rise and affect the economy through various channels, according to an interview with the newspaper published on Saturday.
