The Bank of Japan should raise interest rates at least to 1% to roll back an "abnormally" huge stimulus that is causing unwelcome falls in the yen, said Takeshi Shina, the shadow finance minister of the country's largest opposition party.
The central bank should normalize monetary policy steadily and clarify its intention to do so as its short-term policy rate, currently at 0.25%, is well below levels deemed neutral to the economy, Shina said in an interview on Thursday.
"The BOJ's mandate is to achieve price stability but that isn't being met, as the huge U.S.-Japan interest rate gap is causing yen falls that push up the cost of living," said Shina, known as a vocal critic of ultraeasy monetary policy.
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