The chairman of Japan’s banking lobby echoed Bank of Japan Governor Kazuo Ueda’s cautious view on Japan’s economy on Thursday and said the central bank needed to see sustained wage increases before raising interest rates. ‘interest.
“The economy is currently in a delicate situation, vacillating between positive and negative real wages,” Akihiro Fukutome, president of the Japanese Bankers Association, said at a news conference in Tokyo.
The direction of the economy will become clearer once the results of next year’s spring wage negotiations and the impact of new U.S. President Donald Trump’s plans for the economy are understood, Fukutome said.
Earlier Thursday, the Bank of Japan kept interest rates unchanged, as expected, amid uncertainty over the Trump administration’s policies.
While Japan’s banking sector has been boosted by rate hikes this year after seven years of negative rates that kept lending margins very low, a wave of corporate actions and a shift in savings Investment among retail customers supports healthy profits across the sector, Fukutome said.
Negative interest rates contributed to the end of deflation in Japan, he added.
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