Japanese media: Takashima Sanae conveyed concerns to Ueda Kazuo about further interest rate hikes

According to a report by the Daily News on Tuesday citing sources, Japanese Prime Minister Sanae Takaichi expressed concerns about further interest rate hikes during a meeting with Bank of Japan Governor Kazuo Ueda last week. If the report is true, Takaichi's recent refusal to raise rates again may complicate the Bank of Japan's planning, as coordination with the newly appointed government would become more challenging.

As a result of this report, the yen weakened against both the dollar and the euro. Ueda stated that last Monday's meeting primarily involved a general exchange on the economic and financial situation, and noted that the Prime Minister did not make any specific monetary policy requests. Takaichi herself refrained from discussing the specific details of their meeting, only expressing her hope that the central bank would work closely with the government to achieve its 2% inflation target, accompanied by wage growth.

As the meeting took place, market participants speculated that rising living costs due to the weak yen and other factors could prompt the Bank of Japan to raise interest rates in March or April.