Japan Economic Panel Members Stress BOJ Independence Amid Rate Scrutiny

Four private-sector members of Japan's Council on Economic and Fiscal Policy (CEFP) have urged the government to respect the Bank of Japan's independence while sharing economic assessments. This marks a change from May, when the same members called for caution over further interest rate hikes.

The recommendation comes as long-term Japanese interest rates have risen sharply due to investors pricing in further BOJ hikes and responding to global bond yield increases and Prime Minister Sanae Takaichi's spending plans.

The CEFP members argued that the recent rise in long-term rates cannot be explained by fiscal policy alone, citing Japan's improved primary balance compared to other major economies.

The government has met with 20 securities firms, banks, and asset managers to explain its policies and bolster market confidence following recent bond market volatility.