Japan must keep raising interest rates and tighten fiscal policy as the economy is already in ¡°great shape,¡± former central bank chief Haruhiko Kuroda has said, warning that Prime Minister Sanae Takaichi¡¯s big spending plan could stoke an inflationary upswing.
With the economy enjoying solid growth and steady wage gains, the Bank of Japan can probably raise interest rates about twice a year in 2026 and 2027, said Kuroda, who is known for launching his radical monetary stimulus in 2013 as part of former Prime Minister Shinzo Abe¡¯s Abenomics reflationary policies.
¡°When Abenomics ?was deployed, ?Japan was suffering from deflation and a strong yen. Now, Japan is experiencing inflation and a weak yen. Japan needs to move toward tighter fiscal and monetary policy,¡± Kuroda said in an interview Tuesday.
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