TOKYO: Japan’s government would never convey in advance its preference on how the central bank should set interest rates, Economy Minister Minoru Kiuchi said on Friday, brushing aside market concern over political interference in monetary policy.
Concerns that dovish premier Sanae Takaich’s administration may pressure the Bank of Japan (BOJ) to delay interest rate hikes intensified after a draft economic blueprint said it was
“very important for monetary policy to be guided appropriately to achieve a stronger economy”.
The draft also referred to a clause in law requiring the BOJ to align its policy decisions with the government’s economic agenda, without mentioning another clause stipulating its legal independence from political meddling.
“There’s no change to the government’s stance that specific monetary policy means are left for the BOJ to decide,” Kiuchi told a news conference. “The government will never convey in advance its views to the BOJ about the timing and range of rate hikes or cuts, or the direction of monetary policy,” he said.
But the government and the BOJ should “obviously share” their understanding over economic, price and financial developments, Kiuchi added.
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