Japan government blueprint urges Bank of Japan to back private demand and curb rate hikes

Japan’s draft long‑term economic blueprint calls for the Bank of Japan (BOJ) to coordinate closely with the government and adopt monetary policy that supports private demand and stable price rises. The document, associated with Prime Minister Sanae Takaichi, explicitly pushes back against further rate hikes as the BOJ moves away from ultra‑loose policy, citing legal requirements for policy alignment. It also pledges swift action to prevent deflation while targeting 2 % inflation and a positive wage‑price cycle. The blueprint, due for finalisation in July, follows the BOJ’s recent increase of its policy rate to a 31‑year high of 1 % and comes amid rising bond yields and a yen near a four‑decade low.