As Japan’s race to select a new leader heats up, candidates will be scrutinized for their views on monetary policy, with the shake-up coming at a pivotal moment when the economy is just emerging from decades of deflation.
A recent episode illustrates the risks for politicians when they weigh in on central bank policy. Ahead of the Bank of Japan’s board meeting in July, digital minister Taro Kono — a potential contender to become the next leader of the Liberal Democratic Party — said authorities should hike interest rates to support the yen.
Kono’s comments helped the yen strengthen against the dollar. Finance Minister Shunichi Suzuki criticized the remarks as lacking awareness, and urged Kono "to be careful.”
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