Discussion of Japan's neutral interest rate strategy by a former central bank official
According to Odaily, Masatsumi Wakatabe, former Deputy Governor of the Bank of Japan and member of the government policy group, emphasized the need for Japan to raise its neutral interest rate due to fiscal policy and growth strategies. He noted that if fiscal policy leads to an increase in Japan's neutral interest rate, the Bank of Japan's rate hike would be a natural consequence. However, he cautioned against premature rate hikes and excessive tightening of monetary policy at this time.
Analyst Justin Lowe expressed skepticism about Wakatabe's comments, noting his membership in the government group appointed by Japanese Prime Minister Sanae Takaichi. Lowe suggested that Wakatabe's remarks may align with government interests and oppose a potential rate hike by the Bank of Japan later this week.$BNB
