As the Bank of Japan sets out plans to raise its policy rate from 1.0% to 1.25%, Kato Katsuhiko (加藤勝彦), chairman of the Japan Bankers Association, said at a press conference that the move would not constrain corporate acquisitions. At the same time, enhancing financial institutions’ credit risk management and addressing the increase in household burdens will be key issues.
Kato Katsuhiko (加藤勝彦), chairman of the Japan Bankers Association, said at a press conference that higher interest rates would not constrain corporate acquisitions. The Bank of Japan has indicated that it intends to raise its policy rate from 1.0% to 1.25% at its monetary policy meeting on the 17th and 18th, making this the first additional rate hike in 3 months.
Banks are expected to raise deposit and lending rates in response to higher interest rates, while the increase in household burdens is also drawing attention. The Financial Services Agency plans to strengthen supervision of banks offering ultra-long-term home loans and has requested flexible responses to consultations on early repayments and refinancing.
There is discussion within the government about providing tax incentives for Japanese government bonds for individuals. It was pointed out that an excessive and rapid shift of deposits, which provide the funds for lending, could affect the supply of growth capital.