astrocityarcade| Japan's Liberal Democratic Party official says the Bank of Japan should not delay policy normalization due to risk factors

A senior official of Japan's ruling party said the Bank of Japan should continue to normalize monetary policy according to the economic situation without worrying too much about rising interest rates.AstrocityarcadeThe potential impact.

Takao Ochi, a member of Japan's Liberal Democratic Party, said on Friday that Japan should firmly manage its macroeconomic policy and then deal with it when specific problems arise, otherwise it could enter the fourth "loss".AstrocityarcadeTen years ".

He said that while higher interest rates may put a burden on small companies seeking financing, the central bank should maintain its policy focus on stabilizing inflation of 2% as part of a benign wage-price cycle.

Ochi's view is different from that of some other members of the ruling party. All 10 LDP officials surveyed by Bloomberg in April said the BoJ should not raise interest rates for the second time after raising rates for the first time in 17 years in March.

Ochi said it will not be known until September how much of this year's historic wage rise has contributed to demand-driven price increases. In this year's negotiations, Japan's largest trade union has been promised by big companies to raise wages by more than 5%.

In addition, Ochi suggested that the government should adjust its policy to the level of the exchange rate at the time, rather than trying to manipulate it.

While acknowledging the disadvantages such as rising import costs caused by the depreciation of the yen, Ochi also stressed the benefits of the depreciation of the yen. The weak yen boosted exporters' profits, he said, adding that Toyota, for example, reported record operating profit for the fiscal year, thanks in part to favorable exchange rate factors.

Ochi also cited the surge in inbound tourists and the return of companies to the domestic market as positive aspects of the weak yen. "this is a golden opportunity for both Japanese and foreigners to invest in the yen," Ochi said. 'now is a good time to formulate policies to highlight Japan's attractiveness as an investment destination,'he said.

To reverse the exchange rate trend, Ochi said Japan's fiscal health is critical, as well as interest rate spreads between Japan and the United States and current account balances. Ochi expressed concern about the risk of a long-term budget deficit affecting Japan's credibility. "of course, we will continue to work on fiscal soundness and ensure confidence in the sustainability of our public finances," Ochi said.