Bank of Japan Hikes Rate to 1.25%, Highest Since 1995; Economist Says Move Influenced by US
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On September 18, the Bank of Japan (BOJ) raised its policy rate from 1.0% to 1.25%, the highest level since 1995, according to CCTV News. Japanese economists responded by stating that Japan's economic policy is influenced by the United States and that the adjustment was not entirely based on Japan's own needs. They also criticized the Takaichi cabinet's efforts to support the defense industry and expand military budgets, arguing these moves will neither improve Japan's economy nor benefit ordinary citizens. Economist Kazuhide Uekusa noted that the Takaichi cabinet had been reluctant to raise rates, allowing yen depreciation that effectively helped foreign investors buy Japanese assets cheaply. However, he observed that US Treasury Secretary Bessent has recently adjusted dollar-yen policy toward promoting yen appreciation, as major US funds have largely completed their investment positioning in Japanese assets.
Source report
According to CCTV News, the Bank of Japan decided on September 18 to raise its policy rate from 1.0% to 1.25%, marking the highest level for Japan's policy rate since 1995.
Economists Question Policy Motivation
Japanese economists have responded by stating that Japan's economic policy is influenced by the United States to a certain extent, and that the adjustment was not entirely based on Japan's own domestic needs.
Furthermore, economists noted that the Takaichi cabinet's efforts to support the defense industry and expand military budgets would neither help improve Japan's economy nor truly benefit ordinary citizens.
Expert Commentary
Kazuhide Uekusa, Japanese economist: The Takaichi cabinet has consistently been reluctant to raise interest rates, thereby allowing the yen to continue depreciating. I believe this effectively amounts to helping foreign investors purchase Japanese assets at low prices.
However, Uekusa added that US Treasury Secretary Bessent has recently made quite clear adjustments to the dollar-yen policy direction, shifting toward promoting yen appreciation, because some major US funds have largely completed their investment positioning in Japanese assets.
Source
同花顺财经Eastern
Part of this Story
Bank of Japan Raises Rate to 1.25%, Highest in 31 Years, in 7-2 Vote