The Bank of Japan should raise interest rates at least to 1% to roll back an ¡°abnormally¡± huge stimulus that is causing unwelcome falls in the yen, said Takeshi Shina, the shadow finance minister of the country¡¯s largest opposition party.
The central bank should normalize monetary policy steadily and clarify its intention to do so as its short-term policy rate, currently at 0.25%, is well below levels deemed neutral to the economy, Shina said in an interview on Thursday.
¡°The BOJ¡¯s mandate is to achieve price stability but that isn¡¯t being met, as the huge U.S.-Japan interest rate gap is causing yen falls that push up the cost of living,¡± said Shina, known as a vocal critic of ultraeasy monetary policy.
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