Japan Cabinet Minister To Attend BOJ Meet First Time Since 2020
Shindo’s attendance suggests heightened importance of BOJ’s policy decisions for the government as most economists forecast an end to the negative interest rate policy by April.
(Bloomberg) -- Japan’s economic policy minister Yoshitaka Shindo will attend the Bank of Japan’s policy meeting Tuesday, the first attendance by a cabinet minister since April 2020, according to an emailed notice from the Cabinet Office Monday.
Shindo will attend the last day of the two-day policy meeting, replacing a vice minister from the Cabinet Office who usually goes to the gathering. Representatives from the Cabinet Office and Ministry of Finance regularly attend the policy meetings, although they don’t vote.
Shindo’s attendance suggests heightened importance of BOJ’s policy decisions for the government as most economists forecast an end to the negative interest rate policy by April. While Shindo’s intention is unclear, his participation is likely to fuel market speculation that the BOJ is mulling changing the negative rate sooner or later.
When Yasutoshi Nishimura, a former economic policy minister, attended the BOJ gathering in the height of the pandemic, the BOJ decided to implement additional monetary easing. Memories remain fresh among long-time BOJ watchers that government representatives formally requested that the BOJ postpone a decision to end its zero interest rate at a meeting in August 2000.
Shindo said it’s too early to declare victory in the fight to end deflation at the end of September.
What Bloomberg Economics Says...
“That Shindo is attending the meeting could mean the BOJ is closer to exiting its yield-curve control policy and negative rates earlier than we expect (our base case is July 2024). We think his presence is aimed at putting the brakes on the process.”
— Taro Kimura, economist
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