INTERVIEW: Ex-MOF Official Urges BOJ to Continue Rate Hikes

Tokyo, June 10 (Jiji Press)--Takehiko Nakao, a former senior official at Japan's Ministry of Finance, has called on the Bank of Japan to continue raising interest rates.

In a recent interview with Jiji Press, Nakao, former vice minister of finance for international affairs, said that the BOJ "should continue to steadily raise interest rates and normalize monetary policy."

The current excessive weakening of the yen has come as the BOJ's monetary easing had lasted longer than necessary, he said. Nakao also expressed concern about the risk of asset bubbles, saying that stock and real estate prices as well as housing rents are surging due to ultralow interest rates.

The yen is "extremely cheap," Nakao said. The dollar is currently moving around 160 yen, about 70 yen away from the International Monetary Fund's purchasing power parity of around 93 yen, according to Nakao.

"People and importing companies have been negatively affected" by rising import prices reflecting the weak yen, Nakao said, adding, "Japanese people's ability to buy goods and services from overseas has weakened, leading to a decline in Japan's national power."

[Copyright The Jiji Press, Ltd.]