Prime Minister Ishiba’s “sudden change of heart” discourages unprecedented additional interest rate hikes， raising concerns about the Bank of Japan’s independence．
Prime Minister Shigeru Ishiba’s unusual remarks warning against further interest rate hikes by the Bank of Japan are sending shock waves through financial markets. Ishihara, who is critical of former Prime Minister Shinzo Abe’s economic policy, “Abenomics,” was seen as a supporter of interest rate hikes, so his sudden change of attitude has left the market suspicious. This also poses the risk of undermining the independence of the Bank of Japan. “Unprecedented monetary easing will not cure the Japanese economy.” In his books and elsewhere, Ishihara has criticized the side effects of prolonged large-scale easing. After Ishihara won a comeback victory over former Minister of Economic Security Takaichi Sanae, who pledged to continue Abenomics, in the LDP presidential election on September 27, caution toward Ishihara’s economic policies emerged in the market. This led to the “Ishiba shock,” in which the Nikkei average stock price plummeted by more than 1,900 yen on the 30th. On the evening of October 2nd, the day after he took office as Prime Minister, Ishihara met with Bank of Japan Governor Kazuo Ueda at the Prime Minister’s Office. After the meeting, he told reporters, “I do not believe we are currently in an environment that would call for additional rate hikes.” In response to this, the yen rapidly weakened and stock prices rose in the Tokyo market on the 3rd. A senior official at an economics agency said that with the House of Representatives elections looming, “they tried to revise the statement so as not to give the impression that they are aggressive in raising interest rates.” Central banks are prone to pressure from governments to adopt accommodative monetary policies. The Bank of Japan Act stipulates that the independence of monetary policy must be ensured. Ryutaro Kono, chief economist at BNP Paribas Securities, pointed out, “It was likely an oversight on the part of the prime minister, who is not well-versed in economic policy management, but he should refrain from making remarks that could violate the Bank of Japan Act.” There are concerns that if the view that interest rates cannot be raised due to political pressure spreads, the yen will continue to weaken and consumers will be burdened with further price increases. On the evening of the 3rd, the Prime Minister explained his remarks, saying that he had received an explanation from Ueda that there was enough time to decide whether to raise interest rates, and that “I said that I also understand it that way.” “We must avoid market volatility due to a single word from the prime minister,” said Kodama Yuichi, a fellow chief economist at Meiji Yasuda Research Institute. Former Prime Minister Fumio Kishida did not express any major objections to the financial normalization policy being pursued by Governor Ueda, whom he appointed. A senior Bank of Japan official said, “With Kishida, who appointed him, gone, the bank will be trying to find a balance with the new administration.” Jiji Press, Economic Department, Published on October 6, 2024 at 7:40am.
>>1 The media is stupid and doesn’t understand The independence of the BOJ and the central bank is only independence of means The BOJ does not have independence of goals The government decides the goals Otherwise the government and the central bank would have completely opposing monetary policies The country could collapse.
>>2 There’s no doubt that the increase in employment is the result of the weak yen. If the yen hits 300, Toyota cars can be sold for one-third of their value. The price of Japanese products will be one third. The cost of traveling to Japan will also be reduced by a third. If we do that, the economy will recover in no time.
Abe: “The Bank of Japan is a subsidiary of the government.”
Stop using the double standard. Let’s just call it a subsidiary. In November 2012, Shinzo Abe, president of the Liberal Democratic Party, made an election pledge to implement unlimited monetary easing until the inflation target of 2% was achieved, and as soon as he took power, he had the Bank of Japan implement quantitative easing, which was a very different approach from that of the previous Bank of Japan under Shirakawa.
A sudden change? lol Anyone would be shocked if the futures went down to minus 2500 the moment he won lol Is the reporter a complete idiot lol This is the epitome of a stupid reporter.
Ishihara: “This is the dark side of unprecedented monetary easing. What has Haruhiko Kuroda done? Despite all the warnings from Shirakawa-sama, how foolish of him. Is there no way out now?”
I can’t believe Kishida was better. I’m sorry for making fun of him and saying “this guy only pays attention.” He was much better than the guy who manipulates the yen to weaken and causes prices to rise. I’m sorry, Kishida.
>>19 It’s something the government shouldn’t interfere in. Monetary policy is the sole prerogative of the Bank of Japan, which is independent of the government.
>>19 The Kishida faction was not subject to the slush fund punishment lol Only the Abe faction was punished severely lol This caused the public to become angry They could punish the Kishida faction by not endorsing them this time, but Ishiba can’t do that 70% “cannot accept” that the prime minister was not subject to punishment for the slush fund issue, opinion poll “I’ll leave it to the public to decide” about the prime minister’s responsibility for not being subject to punishment for the LDP slush fund issue Who are the 46 slush fund lawmakers who were “not punished”? Why are they not being held accountable? List of lawmakers who claim they were “involved”
>>37 Well, it’s the media’s job to criticize those in power. If they were to praise the most powerful person, it would be like a certain communist country and it would be disgusting.
It’s not like Hanzawa said he’d pay back twice as much and then come out with an exit. There’s no professional who can smoothly defuse the bomb that is the Unprecedented Monetary Easing. Everyone ran away from the BOJ governor and brought in a retired old man named Ueda.
>>43 What is your understanding of this? The opposition parties have been in a confrontational stance against Ishiba from the beginning. Even the Ishin Party It just seems like the Takaichi cult is upset that Takaichi wasn’t chosen as prime minister and party president.
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