Japan's CEFP Urges Coordination Between Government and Bank of Japan
The Council on Economic and Fiscal Policy called for close coordination between the Japanese government and the Bank of Japan while respecting the central bank's independence.
Private-sector members of the Council on Economic and Fiscal Policy (CEFP) have called for close coordination between the Japanese government and the Bank of Japan (BOJ). While emphasizing respect for the central bank's independence, the council's current position marks a shift from May, when members urged the BOJ to prioritize funding conditions for smaller firms—a move widely seen as a warning against raising interest rates.
These recommendations follow market volatility tied to Prime Minister Sanae Takaichi's annual fiscal and economic blueprint. The blueprint underwent several revisions to prevent the appearance of government pressure on the BOJ to keep rates low. In response to rising long-term interest rates, the government met with approximately 20 financial institutions to explain its policies and stabilize confidence in national finances.
Economy Minister Minoru Kiuchi stated that the government and the BOJ maintain close communication and share a similar understanding of economic and price conditions.
