Ex-BoJ chief Kuroda backs more rate hikes, his former deputy urges caution
TOKYO: The Bank of Japan will likely consider raising interest rates at each upcoming meeting, according to a new book by former bank chief Haruhiko Kuroda, who supported his successor's current push to unwind a decade of extremely loose monetary policy.
Former Bank of Japan (BoJ) chief Haruhiko Kuroda anticipates more interest rate hikes during upcoming meetings, as detailed in his new book. Kuroda backed his successor's efforts to unwind a decade of loose monetary policy. However, this differs from the stance of Kuroda's former deputy, Masazumi Wakatabe, who published a book in September cautioning against premature rate hikes. Wakatabe, along with Prime Minister Sanae Takaichi, focuses on preserving the legacy of Abenomics.
Kuroda, who participated in Shinzo Abe's Abenomics reflationist policies, believes the BoJ should consider raising rates by 25 basis points at each policy meeting to approach neutral economic levels. He warns that raising rates too quickly could lead to economic stagnation, while delaying any increase could hinder incumbent governor Kazuo Ueda from completing policy normalization.
Wakatabe, however, argues for caution, stating that low real economic growth and half of price increases being due to cost-push factors are current priorities for monetary policy. He is a reflationist with close ties to Takaichi and serves on a key government economic panel. Kuroda implemented a radical stimulus program in 2013 aiming to raise inflation to the BoJ's 2% target within two years, but this goal was unmet, leading to prolonged ultra-loose policy throughout his tenure.
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