Japan Panel Urges Coordination with BOJ, Emphasizes Central Bank Independence

Japan's economic advisory panel highlighted the importance of maintaining close coordination between the government and the Bank of Japan (BOJ) while respecting the central bank's independence in monetary policy operations.

The Council on Economic and Fiscal Policy, which includes economy-related ministers and the BOJ governor, oversees Japan's fiscal blueprint and long-term economic policies. In a statement submitted to the panel's meeting, private-sector members emphasized that the government and BOJ should share assessments of economic and price developments and work together in close coordination.

The recommendations mark a shift from May, when they urged the BOJ to pay attention to funding conditions at smaller firms, seen as a call for caution on further interest rate hikes. Japan's Economy Minister Minoru Kiuchi stated that the government and BOJ maintain close communication and regularly exchange views at various levels.