Sources say that Sanae Takaichi conveyed her concerns about further interest rate hikes to Kazuo Ueda.
PANews reported on February 24th that, according to a report by the Mainichi Shimbun citing sources on Tuesday, Japanese Prime Minister Sanae Takaichi expressed concerns about further interest rate hikes during a meeting with Bank of Japan Governor Kazuo Ueda last week. If true, Takaichi's recent refusal to raise interest rates again could complicate the Bank of Japan's plans, as coordination with the newly appointed government will become more challenging. The report caused the yen to weaken against both the dollar and the euro. Ueda stated that the meeting last Monday mainly involved a general exchange on the economic and financial situation, and that the prime minister did not make any specific monetary policy requests. Takaichi herself avoided discussing the specific details of their meeting, only stating that she hoped the central bank would work closely with the government to achieve its 2% inflation target, accompanied by wage growth. This meeting came as market participants speculated that rising living costs due to factors such as a weak yen might prompt the Bank of Japan to raise interest rates in March or April.
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