Japan Innovation Party, the junior coalition partner in the government, co-leader Hidetaka Fujita said it would be premature for the Bank of Japan to deliver an early interest rate hike, warning that such a move could send a confusing signal to businesses.
- Fujita said this was “not the time for policy shifts that have a major impact,” stressing the need for stability as firms adjust to higher costs and a fragile recovery.
- On fiscal policy, Fujita confirmed that the government would not raise taxes to finance the earlier-than-planned increase in defence spending.
His comments come as Tokyo prepares to frontload parts of its multi-year defence budget to strengthen deterrence capabilities amid regional security tensions.
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The Japan Innovation Party (Ishin), a junior partner in the ruling coalition with Prime Minister Sanae Takaichi’s Liberal Democratic Party, has generally supported fiscal restraint while backing targeted security investments. Fujita’s remarks suggest continued caution over tightening monetary policy too soon, even as inflation and wage dynamics evolve.
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Fujita’s comments point to coalition unease over hasty BoJ tightening and reinforce expectations for gradual policy shifts. His stance also signals fiscal prudence as Japan accelerates defence spending.