Key insights
- Former BOJ Deputy Governor Wakatabe suggests the timing of a rate hike is secondary to the Japanese economy's ability to handle tighter policy. This implies a cautious approach from the BOJ, potentially limiting upward pressure on global yields and offering slight support to risk assets, but also signals underlying economic concerns.
TOKYO, May 28 (Reuters) - Former Bank of Japan Deputy Governor Masazumi Wakatabe said on Thursday that the timing of a potential interest rate hike is less important than whether the economy can withstand tighter monetary policy.
"Whether the Bank of Japan raises rates in June is not the essential issue. What really matters is whether the economy is in a condition where the Bank of Japan can raise interest rates," Wakatabe said, speaking at a meeting of a pro-spending bloc within the ruling Liberal Democratic Party.
Wakatabe, professor at Waseda University, is a member of the government’s key economic panel, the Council on Economic and Fiscal Policy.