Japan's Economic Panel Emphasizes Coordination with BOJ Amid Market Turmoil

The Japanese government's economic advisory panel has emphasized the importance of maintaining close coordination between the Bank of Japan (BOJ) and the government on monetary policy, while respecting the central bank's independence. This shift in tone comes after a previous call for caution on further interest rate hikes.

The private-sector members of the Council on Economic and Fiscal Policy (CEFP) submitted a statement to the panel's meeting, stressing that the BOJ's independence should be respected in monetary policy operations. However, they also emphasized the need for close coordination between the government and the BOJ on economic and price developments.

The CEFP is chaired by the prime minister and includes economy-related ministers and the BOJ governor, overseeing Japan's fiscal blueprint and long-term economic policies. The private-sector members' proposals form a basis of discussions at the panel.