Prime Minister Takaichi urges caution on further rate hikes as BOJ Deputy Governor warns of inflation overshoot risks.
Japanese Prime Minister Sanae Takaichi urged policy restraint after Bank of Japan Deputy Governor Ryozo Himino warned of inflation overshoot risks. Himino stated that delayed monetary tightening could exacerbate price pressures amid rapid energy cost pass-through, despite recent rate hikes.
Himino’s testimony highlighted that monetary conditions remain highly accommodative, even after the BOJ’s recent benchmark rate increase. He noted that Middle East tensions easing had not altered the central bank’s economic outlook, reinforcing concerns about persistent inflation.
Takaichi emphasized the need for close coordination between the government and BOJ, signaling political preference for stable rates. Analysts interpret her remarks as a push to pause further tightening, balancing inflation risks with economic growth concerns.