Japanese Finance Minister Suzuki: Rate hikes could hamper economic growth

Ross J Burland FXStreet

The Japanese Finance Minister, Shunichi Suzuki, said on Friday that hiking rates could knock the economy's recovery, signalling support for the Bank of Japan's stance to keep monetary stimulus despite a global tightening trend amid rising inflation.

"Generally speaking, rate hikes could cause the economy to falter," Suzuki told reporters when asked about the BOJ's decision on Thursday to retain its ultra-easy policies as reported by Reuters.

Key notes

Need to pay full attention to risk of rising inflation exerting downward pressure on economy.
Will likely tap budget reserve to cover the cost of national funeral for ex-pm Abe.
Monetary policy up to BoJ to decide.
Export growth not keeping in pace with yen weakening.
Generally speaking, rate hikes could hamper economic growth.
Hard to single out one specific factor for the cause of trade deficit.

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