Key Facts
• October 9, Etsuro Honda, former Cabinet Advisor, spoke to Kyodo News.
• Honda warned against Bank of Japan’s additional rate hikes, citing demand concerns.
• Takaiichi Sanae, LDP leader candidate, supports maintaining 0.50% policy rate.
• Honda predicts no rate hike in October but sees potential in December.
• Honda highlighted risks to housing loans and investments from rate increases.
• He emphasized Japan’s incomplete recovery from deflationary mindset.
• Honda viewed recent yen depreciation as beneficial for Japan’s economy.
Summary
Etsuro Honda, former economic advisor to ex-Prime Minister Shinzo Abe, expressed concerns over potential Bank of Japan rate hikes, urging caution to avoid cooling demand. Speaking on October 9, Honda noted that Takaiichi Sanae, a candidate for LDP leadership, supports maintaining the current 0.50% policy rate. While Honda does not foresee a rate hike in October, he acknowledged the possibility of one in December. He warned of adverse effects on housing loans and investments, stressing Japan’s incomplete recovery from deflationary tendencies. Additionally, Honda analyzed the recent yen depreciation as a positive factor for Japan’s economy.
