By Leika Kihara
TOKYO, Dec 5 (Reuters) – Japan’s economic revitalisation minister, Minoru Kiuchi, called on the central bank to closely communicate with the government in setting monetary policy on Friday, but did not voice opposition to a near-term interest rate hike.
Asked about growing prospects of an interest rate hike by the central bank in December, Kiuchi said that specific policy means was for the Bank of Japan to decide.
The remarks by Kiuchi, who is known to be an advocate of loose monetary policy, reinforces the market view that the government will not push back against any decision to raise interest rates to 0.75% from 0.5% this month.
“I hope the BOJ continues to guide monetary policy appropriately to stably achieve its 2% inflation target working closely with the government,” he told a news conference on Friday.
Kiuchi also said he hoped the central bank sets policy mindful of BOJ rules that require the central bank to closely communicate with the government.
BOJ Governor Kazuo Ueda said on Monday the bank will consider the “pros and cons” of raising rates at its December 18-19 meeting.
Sources have told Reuters the BOJ is likely to raise rates in December and the government is likely to accept the decision.
Kiuchi oversees the Cabinet Office which, along with the Ministry of Finance, has the authority to send representatives to attend the BOJ’s policy meetings. The representatives cannot vote but can request a delay in the board’s vote on rates.
(Reporting by Leika KiharaEditing by Alexandra Hudson, Elaine Hardcastle)
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