An economic adviser to Takaichi has cautioned the Bank of Japan (BOJ) against increasing interest rates in December. The recommendation comes amid ongoing concerns about the potential impact of tighter monetary policy on Japan’s fragile economic recovery. With inflation still showing signs of volatility and wage growth remaining uneven, premature tightening could undermine recent gains in consumer spending and business confidence. The adviser emphasized that maintaining accommodative financial conditions through the end of the year would provide more time to assess underlying economic trends. This stance contrasts with growing speculation among some policymakers about the possibility of a rate adjustment before 2025 concludes. However, the adviser warned that such a move might disrupt market stability and weaken domestic demand just as inflation expectations begin to stabilize.
— news from Reuters
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BOJ should avoid December rate hike, says Takaichi’s economic adviser Reuters