Some members on Japan panel urge BOJ to raise rates to counter weak yen By Reuters

TOKYO (Reuters) – The Bank of Japan must raise interest rates to prevent excessive declines in the yen, private-sector members of a key government council said at a meeting last week where Governor Kazuo Ueda was present, minutes of the meeting showed on Wednesday.

“It’s important for monetary policy to more freely move toward normalisation,” if the wide U.S.-Japan interest rate gap is causing a weak yen and hurting consumption, Mana Nakazora, a BNP Paribas (OTC:) Japan strategist who is a member of the government’s top economic council, was quoted as saying.

Takeshi Niinami, another council member who heads brewer Suntory Holding, also said the BOJ’s policy was important “from the standpoint of avoiding excessive yen falls and controlling inflation,” according to the minutes.

“The government should prepare on the assumption that interest rates will rise ahead,” he said.

The remarks were made at a meeting of the government’s top economic council on July 19, where members discussed the government’s long-term economic forecasts.

Prime Minister Fumio Kishida and his key economic ministers were also present at the meeting, as well as BOJ governor Ueda.

The BOJ meets for a two-day policy meeting ending on July 31 when it will debate whether to raise interest rates, and release a detailed plan on how to taper its huge bond buying.

Some politicians have called on the BOJ to offer more clarity on its rate hike plan partly to prevent the yen from testing fresh lows against the dollar.

While a weak yen gives exports a boost, it has become a source of concern for policymakers by pushing up the cost of imports and hurting consumption.