Nomura Economist Says Japan PM’s Economic Blueprint May Affect BOJ Rate-Hike Timing

A Nomura Research Institute economist said Japan’s prime minister could use an economic policy blueprint to influence the timing of the Bank of Japan’s next interest-rate move. According to Jin10, economist Takahide Kiuchi said that if Japanese Prime Minister Sanae Takaichi uses her “Basic Policy” economic blueprint—expected to receive cabinet approval this month—to block further rate hikes, it could delay the BOJ’s next step. Kiuchi said that even if the government opposes higher rates, the BOJ would still raise interest rates when it deems it necessary, but it may to some extent respect the government’s preferences on timing. He added that government pressure against BOJ rate hikes could further weaken the yen and push bond prices lower, which he said would undermine the stability of Japan’s economy and financial markets.