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- Japanese Finance Minister Suzuki: Rate hikes could hamper economic growth
Japanese Finance Minister Suzuki: Rate hikes could hamper economic growth
The Japanese Finance Minister, Shunichi Suzuki, said on Friday that hiking rates could knock the economy's recovery, signalling support for the Bank of Japan's stance to keep monetary stimulus despite a global tightening trend amid rising inflation.
"Generally speaking, rate hikes could cause the economy to falter," Suzuki told reporters when asked about the BOJ's decision on Thursday to retain its ultra-easy policies as reported by Reuters.
Key notes
- Need to pay full attention to risk of rising inflation exerting downward pressure on economy.
- Will likely tap budget reserve to cover the cost of national funeral for ex-pm Abe.
- Monetary policy up to BoJ to decide.
- Export growth not keeping in pace with yen weakening.
- Generally speaking, rate hikes could hamper economic growth.
- Hard to single out one specific factor for the cause of trade deficit.
USD/JPY update
Meanwhile, USD/JPY is attempting to recover from the central bank-induced sell-off from overnight. The European Central Bank hiked rates by 50bps and this weighed on the greenback sending USD/JPY off a cliff to 137.02 from where it is stabilising at in Tokyo on Friday.
Read more: USD/JPY Price Analysis: Bulls make a move in Tokyo open and eye significant correction
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