FILE PHOTO: The Japanese national flag waves at the Bank of Japan building in Tokyo, Japan March 18, 2024. REUTERS/Kim Kyung-Hoon/File PhotoTOKYO : Japan's weak consumption may heighten, rather than tame, already growing political pressure on the central bank to raise interest rates to slow the yen's declines blamed for hurting households via higher import costs.
The soft readings alone likely won't force the BOJ to overhaul a steady rate hike plan laid out in April, as policymakers are focusing more on whether consumption will rebound later this year as they project, analysts say. Inflation must stay moderate so firms can earn enough to keep raising wages, Masakazu Tokura, head of business lobby Keidanren, told the government's top economic council on May 10.
After a meeting with Kishida on May 7, Ueda said the BOJ will be"vigilant" to yen moves in setting monetary policy. A day later, he said the BOJ may hike rates if yen falls affect prices significantly.
Source: Loan Digest (loandigest.net)
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