world-economy

Japanese Policy Panel Cautions BOJ Against Hasty Rate Increases

A government advisory panel has recommended the Bank of Japan proceed cautiously with monetary tightening, citing risks to corporate financing conditions as policymakers weigh inflation pressures. The guidance suggests BOJ Governor Kazuo Ueda may encounter resistance if he pursues a rate hike at next month's meeting. The central bank has signaled openness to raising its benchmark rate, citing Middle East-related inflation risks highlighted in last month's board discussion. However, mixed economic signals complicate the decision. Tokyo's inflation gauge unexpectedly cooled, supported by expanded childcare subsidies and remaining below the BOJ's target. Meanwhile, Japanese workers' real wages rose for a third consecutive month, strengthening the case for rate increases despite geopolitical uncertainty affecting the broader economic outlook.