TOKYO: TAKAICHI Sanae, a contender to become Japan’s first female prime minister, said on Wednesday the government is responsible for setting the direction of fiscal and monetary policy.

Specific means of monetary policy should be decided by the Bank of Japan, Takaichi told a news conference, when asked about her past remark criticising the BOJ’s interest rate hikes.

“If interest rates rise sharply, that could raise questions as to whether companies can direct enough money for investment. It could also affect households’ mortgage rates,” Takaichi said.

Japan’s recent rise in inflation is driven mostly by higher import costs, she said.

“With aid to households and investment to boost productivity, I’d like to shift Japan’s state of inflation into a moderate one driven by wage growth,” Takaichi said. 

Reuters