Geoff Yu notes that Japan’s Growth Strategy Minister Minoru Kiuchi rejected reports that the government was trying to cut interest rates or put pressure on the Bank of Japan (BoJ). It highlights continued coordination with the BOJ as the latest data shows mighty nominal wage growth but weaker real wages, modest household spending and improving convergent indicators, with a short-term stronger Japanese yen against the dollar.
Political position stable, data sending mixed signals
“Japanese Growth Strategy Minister Minoru Kiuchi has dismissed media reports that Prime Minister Sanae Takaichi’s government is trying to cut interest rates, saying there is “absolutely no truth” in the claim that fiscal expansion is intended to put pressure on the BoJ. “The omission of ‘fiscal consolidation’ in the draft basic policy guidelines was not intended to weaken fiscal discipline but to present fiscal sustainability in a more concrete and verifiable way,” he said.
“The comments come as markets analyze whether the administration’s pro-growth agenda and large-scale investment plans could limit further increases in the BOJ’s interest rates.”
“Kiuchi reiterated that the government expects close coordination with the BOJ and appropriate monetary policy conduct.”
“Japan’s actual profits rose 1.4% y/y in May, below estimates of 1.7% and the revised April figure of 1.9% y/y.”
“Japanese household spending fell 0.4% y/y in real terms in May, the sixth consecutive negative month, from -0.5% in April.”
(This article was created with the assist of an artificial intelligence tool and has been reviewed by an editor. Find out more.)
