Corporate titans in Japan are applauding the Bank of Japan’s (BOJ) groundbreaking decision to increase interest rates for the first time in 17 years, marking a pivotal moment in the nation’s economic landscape. The head of Japan’s largest business lobby, Keidanren, expressed full support, affirming that the BOJ’s action was timely and aptly chosen.
“I think the BOJ has caught the indications that a virtuous cycle between wages and prices has started,” remarked Keidanren Chairman Masakazu Tokura, highlighting the optimism prevailing among business leaders.
As anticipated, the BOJ’s announcement on Tuesday signified the end of an era of negative interest rates and other unconventional policies employed over the past eight years. However, analysts predict that the rates are likely to remain near zero for the foreseeable future, as a cautious approach is warranted due to the fragile state of the ongoing economic recovery.
The central bank’s decision came on the heels of reports indicating stronger-than-expected pay raises by corporations, sparking hopes of increased household spending that could fuel a robust domestic demand and foster sustained growth across the broader economy.
