BOJ Seen as Increasingly Likely to Raise Policy Rate This Month

Tokyo, Dec. 5 (Jiji Press)--The Bank of Japan is seen as increasingly likely to raise its policy interest rate from the current 0.50 pct to 0.75 pct at its Dec. 18-19 policy-setting meeting, as pressure from the administration of Prime Minister Sanae Takaichi is receding.

The Takaichi administration has indicated that it would tolerate a BOJ rate hike, given the risk that the central bank delaying a rate hike could spur the yen's weakening and thus boost import prices.

At a press conference on Friday, Finance Minister Satsuki Katayama said that her communication with BOJ Governor Kazuo Ueda has been "very good in various ways" and that she will leave specific monetary policy measures to the BOJ.

Initially, Takaichi argued that the government should be responsible for monetary policy, and her economic advisers, such as former BOJ Deputy Governor Masazumi Wakatabe, warned against an early rate hike.

Still, the prime minister has refrained from publicly sending warnings to the central bank since her first meeting with the BOJ governor last month.

[Copyright The Jiji Press, Ltd.]