LDP’s Saito Urges BOJ Caution on Rate Hikes Amid Tariff Strains

Japanese ruling-party heavyweight Ken Saito urged the Bank of Japan to proceed cautiously with any further interest-rate increases, warning that another hike could undermine an economy already bracing for the impact of higher U.S. tariffs. “Everything would be in tatters if the BOJ cools the economy,” the former trade minister told Reuters in an interview on 6 August. Saito’s remarks underscore growing political pressure on Governor Kazuo Ueda, who ended a decade of massive stimulus last year and lifted the policy rate to 0.5% in January. Economists polled by Reuters still expect another move before year-end, but Saito said the central bank should prioritise supporting companies’ ability to lift wages as 145% U.S. levies squeeze exporters’ profits. The Liberal Democratic Party veteran also called on Prime Minister Shigeru Ishiba to resign after July’s heavy election defeat, arguing the party needs a new leader to build a broader coalition and deliver consistent economic policy. Saito rejected opposition proposals to cut the sales tax, saying Japan should instead pursue growth strategies that reinforce the nascent cycle of higher pay and prices.