TOKYO: New Japanese Prime Minister Shigeru Ishiba suggested Wednesday that it is not appropriate for the Bank of Japan to raise interest rates further in the current situation.

“Personally, I don’t think (Japan is) now in such an environment (warranting an additional BOJ rate hike),” Ishiba told reporters at the prime minister’s office after meeting with BOJ Governor Kazuo Ueda.

The Ishiba-Ueda meeting came just a day after Ishiba took office. It is rare for a new prime minister to meet with the BOJ governor at such an early stage.

In the face of the Japanese stock market plunge earlier this week in a so-called “Ishiba shock” over concerns about his economic policies, the meeting was apparently aimed at promoting stability in financial markets by emphasizing close cooperation between the government and the central bank.

Separately speaking to reporters after the meeting, Ueda revealed that he told the new prime minister the BOJ “will continue to carefully monitor” economic and price developments as it has “sufficient time” to decide whether to raise interest rates further.

“We agreed that the government and the BOJ will continue to cooperate closely,” Ueda said. The 2013 government-BOJ statement, which clarified a goal of achieving 2 pct inflation, was not mentioned in the meeting, according to the BOJ chief.

 Ueda said he explained to Ishiba that the BOJ’s monetary policy is now extremely accommodative to fully support the Japanese economy, and that the BOJ will continue to adjust the degree of monetary easing if the economy and prices move in line with its outlook.

“We had a meaningful exchange of views in a friendly atmosphere,” Ueda said. “I didn’t receive any specific requests from the prime minister regarding monetary policy,” he added.

JIJI Press