Japan must keep raising interest rates and tighten fiscal policy as the economy is already in “great shape,” former central bank chief Haruhiko Kuroda has said, warning that Prime Minister Sanae Takaichi’s big spending plan could stoke an inflationary upswing.
With the economy enjoying solid growth and steady wage gains, the Bank of Japan can probably raise interest rates about twice a year in 2026 and 2027, said Kuroda, who is known for launching his radical monetary stimulus in 2013 as part of former Prime Minister Shinzo Abe’s Abenomics reflationary policies.
“When Abenomics ?was deployed, ?Japan was suffering from deflation and a strong yen. Now, Japan is experiencing inflation and a weak yen. Japan needs to move toward tighter fiscal and monetary policy,” Kuroda said in an interview Tuesday.
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