Time's not right for rate hike, says Japanese premier

Agencies and staff reporter

Japanese Prime Minister Shigeru Ishiba said the country is not in an environment for an additional rate hike, in an apparent effort to shake off his reputation as a monetary hawk, after a meeting with Bank of Japan Governor Kazuo Ueda yesterday.

"I do not believe that we are in an environment that would require us to raise interest rates further," Ishiba told reporters yesterday night, adding he was not in a position to instruct the central bank on monetary policy.

The Japanese yen once weakened over 0.82 percent to 144.75 per US dollar yesterday. Each 100 yen stood at HK$5.34.

At the meeting, Ueda's first with the new prime minister since he was officially appointed on Tuesday, Ueda said that the central bank was supporting Japan's economy and will move cautiously in deciding whether to raise interest rates further.

"I told the prime minister that we are supporting the economy with loose monetary conditions," Ueda said.

Ueda added the BOJ will raise interest rates if economic and price developments move in line with its forecast.

The BOJ will review rates on October 30-31, when the board also releases fresh quarterly growth and price forecasts. It holds another meeting in December.

Meanwhile, a consumption-driven recovery in the UK could set off a renewed bout of inflation, but more interest rate cuts are likely as prices are "moving in the right direction," Bank of England policymaker Megan Greene said.

The BOE also warned that global asset prices remain stretched and are vulnerable to a big fall as investors grow more concerned about geopolitical risks.