The Bank of Japan decided to raise its policy rate at its monetary policy meeting on 18 September. Prime Minister Takaichi Sanae (高市早苗) is said to have tacitly accepted the BOJ's decision, highlighting her difficult position amid considerations for Japan-U.S. relations and expansionary fiscal policy.
The Bank of Japan decided to raise its policy rate for the first time since June, affecting the market. Prime Minister Takaichi Sanae (高市早苗) is said to have approached the decision by tacitly accepting the BOJ's judgment, signaling that the Cabinet would take the market's confidence into consideration.
Although Takaichi Sanae (高市早苗) is said to have remained opposed to rate hikes after taking office, her Basic Policy on Economic and Fiscal Management and Reform calls for large-scale public- and private-sector investment. She is reportedly continuing difficult efforts to balance fiscal policy with market stability.
U.S. involvement is said to be influencing the BOJ's decision. U.S. Treasury Secretary Bessent (ベセント) met with the Bank of Japan governor and called for sound monetary policy to stabilize inflation expectations and avoid excessive exchange-rate volatility.
Experts have pointed out that the rate hike was within the government's expectations, and believe that U.S. involvement to preserve the BOJ's independence may continue. Some also suggested that revisions to Takaichi Sanae's (高市早苗) fiscal policy should lead to the promotion of growth investment.