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Fukui on consumer spending

January 13, 2007
By Ken Worsley


Bank of Japan Governor Toshihiko Fukui had this to say yesterday:

Based on a slow increase in employee salaries, private consumption is on the increase, although the pace is slow.

In general, the media seems to be taking this as a hint that interest rates will be raised at the BOJ governor’s meeting next week. Fukui, of course, did not provide any data to back up his statement, and what data is out there seems to suggest no solid trend in the direction he speaks of.

Filed Under Bank of Japan, Consumer Spending, Finance 

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Comments

2 Responses to “Fukui on consumer spending”

  1. Adamu on January 13th, 2007 8:44 pm

    It’s hard to know what to think - Fukui has made no secret of his desire to raise interest rates for the sake of his own legacy, and the political pressure to try and stop him from making a move that might tank the economy might only steel his resolve. On the other hand, a gradual rise in interest rates might restore monetary policy as a tool to steer the economy. I’ll be on pins and needles until the BOJ meeting next week.

  2. Ken Worsley on January 15th, 2007 2:06 am

    Here’s what I’m wondering: How much faith does the Abe kantei have in the economic recovery lasting long enough for the to sweep the Upper House elections? If they don’t think it will last that long, why not let Fukui raise them? Then, if (or rather, when) the economy turns down, they have someone to blame all lined up.

    Not sure if they’re thinking in those terms, but if pressure is put on the BOJ not to raise rates, at least it is, in an odd sense, a vote of confidence in the status quo.

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