Japanese Economic Panel Emphasizes Need for Government-BOJ Coordination

Japan's key economic advisory panel emphasized the need for close coordination between the government and the Bank of Japan (BOJ) on monetary policy while respecting the central bank's independence.

The four private-sector members of the Council on Economic and Fiscal Policy (CEFP), which is chaired by the prime minister, submitted a statement to the panel's meeting that highlighted the importance of close coordination between the government and BOJ in economic and price developments.

The CEFP oversees Japan's fiscal blueprint and long-term economic policies. The private-sector members' proposals form a basis for discussions at the panel.

These recommendations come as Japan's long-term interest rates have risen sharply due to investors pricing in further BOJ rate hikes, scrutinizing Prime Minister Sanae Takaichi's spending plans, and reacting to a broader rise in global bond yields.