BOJ needs clearer signal on rate hikes – LDP official

The Bank of Japan (BOJ) needs to show its commitment clearly to normalising monetary policy by increasing interest rates gradually, according to Toshimitsu Motegi, a senior official in the ruling party.

Motegi, the secretary-general of the Liberal Democratic Party, emphasised that excessive depreciation of the yen has detrimental effects on Japan’s economy, as reported by the Nikkei newspaper on Monday.

To prevent further yen depreciation, Motegi suggested that the BOJ should clearly signal a move away from extensive stimulus measures. He also mentioned that Japanese companies are likely able to withstand tighter monetary policies.

These comments were made before the upcoming BOJ policy meeting on July 31, when the board will discuss the possibility of increasing interest rates from their current near-zero levels.

Attribution: Reuters