Japan PM Takaichi to hold first meeting with BOJ chief Ueda since election win

By Leika Kihara

TOKYO, Feb 16 (Reuters) - Bank of Japan Governor Kazuo Ueda and Prime Minister Sanae Takaichi volition clasp their archetypal bilateral gathering connected Monday since the ruling party's landslide predetermination victory, ‌which could service arsenic a venue to sermon the cardinal bank's rate-hike plans.

The gathering astatine 5 p.m. (0800 ‌GMT) comes amid simmering marketplace speculation that the rising outgo of living, driven successful portion by the anemic yen, could prod the cardinal ​bank to rise involvement rates arsenic soon arsenic March oregon April.

Their erstwhile face-to-face talks, held successful November, laid the groundwork for the BOJ's complaint hike successful December. At the clip of the meeting, the yen was slumping connected the presumption that Takaichi would propulsion backmost against an aboriginal complaint hike by the BOJ.

Ueda told reporters aft the November gathering the ‌premier "seemed to person acknowledged" his mentation that ⁠the BOJ was gradually raising rates to guarantee Japan made a creaseless landing towards its ostentation target. A period later, the BOJ raised its short-term argumentation complaint to a ⁠30-year precocious of 0.75%.

Takaichi's historical predetermination triumph connected February 8 has heightened marketplace attraction to whether the dovish premier volition renew her calls for the BOJ to support involvement rates low.

The yen's caller rebound whitethorn alteration the government's presumption connected ​the desirable ​pace of aboriginal complaint hikes, immoderate analysts say. After sliding ​close to the psychologically important 160 people ‌in January, the yen gained astir 3% past week successful its largest emergence since November 2024. The dollar stood astatine 152.66 yen successful Asia connected Monday.

Under Japanese law, the BOJ nominally enjoys independency though that has not shielded it from past governmental unit to grow monetary enactment for a moribund economy. Yen moves person historically been cardinal triggers of BOJ enactment arsenic politicians use unit connected the cardinal slope for steps to power marketplace moves.

Known arsenic ‌an advocator of expansionary fiscal and monetary policies, Takaichi has stayed ​mum connected BOJ policy, but made comments during her predetermination run ​that were interpreted by markets arsenic preaching the ​benefits of a anemic yen.

She besides has the authorization to capable 2 seats opening ‌up astatine the BOJ's nine-member committee this year, ​which could power the cardinal ​bank's argumentation debate.

Under Ueda, the BOJ exited his predecessor's monolithic stimulus successful 2024 and has raised short-term rates respective times including successful December. With ostentation exceeding its 2% people for astir 4 years, the ​BOJ has stressed its readiness to support ‌raising involvement rates. Markets person astir priced successful an 80% accidental of different hike by April.