BOJ Chief Holds First Official Meeting with PM Takaichi

Japan’s central bank and the government held a key meeting on Tuesday as Bank of Japan (BOJ) Governor Kazuo Ueda met with newly appointed Prime Minister Sanae Takaichi — the first bilateral discussion between the two since her cabinet took office.

The meeting at 3:30 p.m. (0630 GMT) in Tokyo comes amid increased pressure on the BOJ to raise interest rates, following the yen’s slide to a nine-month low. While Ueda has indicated a possible rate hike as early as next month, Takaichi has urged caution and called for closer coordination between monetary policy and government fiscal policy.

Markets are watching whether Takaichi will permit the BOJ to proceed with an imminent rate rise — the bank’s current benchmark rate stands at 0.5 % and many expect it could go to 0.75 %. 

• BOJ Governor Ueda meets PM Sanae Takaichi for the first time amid pressure for a rate hike
• Markets watch for signals as Japan weighs a move from 0.5% to 0.75% amid persistent inflation
• Talks expected to shape coordination between Japan’s monetary and fiscal policy strategies

At the same time, Japan’s inflation has persisted above the BOJ’s 2 % target for more than three years, though the economy reported an economic contraction in the third quarter, raising concerns about timing for a hike.

A senior strategist noted: “The focus of the talks will be on whether the premier will be more specific about what exactly she means when calling for the BOJ to move in lockstep with the government.”

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The outcome of this meeting is likely to shape the dynamics between the BOJ and the government, and will be interpreted by investors for clues on the future path of Japan’s monetary policy.