TOKYO, July 15 (Reuters) – Japanese Prime Minister Sanae Takaichi on Wednesday said she saw no link between her government’s draft economic blueprint and a recent market rout that has driven Japanese government bond (JGB) yields to multi-decade highs.
“I do not believe that a single draft government document, which has not even been approved by the cabinet yet, is the cause of the market shock,” Takaichi told parliament.
Concerns about political interference in monetary policy have grown since the government in its draft blueprint said it was “very important for monetary policy to be guided appropriately to achieve a stronger economy”. The draft was followed by a selloff in JGBs.
Takaichi also said interest rates, as well as foreign exchange rates, are “determined by a variety of factors. Looking at today’s market moves, for example, there are influences from U.S. interest rates and employment data,” she said.
The prime minister said she saw the current debate on temporary cuts in food sales tax as a chance to establish a system in which consumption tax rates could be changed flexibly.
Asked about the yen’s persistent weakness, she said boosting domestic investment and strengthening international competitiveness would raise potential growth and maintain confidence in the yen.
(Reporting by Makiko Yamazaki; Editing by Muralikumar Anantharaman and Christopher Cushing)
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