Japan's Economic Panel Stresses Coordination with BOJ Amid Rising Interest Rates

Members of Japan's key economic advisory panel have underlined the importance of close coordination between the government and the Bank of Japan (BOJ) on monetary policy, while stressing respect for the central bank's independence. The recommendations from the private-sector members of the Council on Economic and Fiscal Policy (CEFP) come as long-term interest rates in Japan have risen sharply.

The CEFP, which is chaired by the prime minister and includes economy-related ministers and the BOJ governor, oversees Japan's fiscal blueprint and long-term economic policies. The private-sector members' proposals form a basis of discussions at the panel, and their statement reflects lessons from market turmoil that followed successive drafts of Prime Minister Sanae Takaichi's annual fiscal and economic blueprint.

The government and the BOJ maintain close communication and regularly exchange views at various levels, according to Economy Minister Minoru Kiuchi. The CEFP's private-sector members stressed in their statement that the recent rise in long-term interest rates cannot be explained by fiscal policy alone.