Japan government denies pressuring BoJ to keep rates low

The Japanese government has firmly rejected allegations that it is attempting to pressure the Bank of Japan to maintain low interest rates.

Officials moved quickly to dispel market rumors suggesting a willingness to relax fiscal reform commitments in exchange for accommodative monetary policy, describing the speculation as a misunderstanding of the administration's economic strategy.

Markets had grown wary after reports surfaced that a draft economic plan emphasized large-scale government spending and a preference for low borrowing costs.

The denial comes amid heightened sensitivity regarding the independence of the central bank.

Markets had grown wary after reports surfaced that a draft economic plan emphasized large-scale government spending and a preference for low borrowing costs.

The government's clarification aims to reassure investors that monetary policy decisions remain solely within the purview of the BoJ, free from political interference.

This development follows recent comments from Japan’s economic policy minister, Kiuchi, who had previously denied any attempt to influence the central bank.