Market News

• Summary

• BOJ must gradually raise interest rates toward neutral level
• BOJ can probably hike rates about twice each in 2026, 2027
• Big spending, tax cuts could backfire by fueling inflation
• Recent yen levels may be 'somewhat too weak'
• End to Japan's deflation means BOJ can keep a low profile

TOKYO, Feb 25 (Reuters) - Japan must keep raising interest rates and tighten fiscal policy as the economy is already in "great shape," former central bank chief Haruhiko Kuroda said, warning that Premier Sanae Takaichi's big spending plan could stoke an inflationary upswing.
With the economy enjoying solid growth and steady wage gains, the Bank of Japan can probably raise interest rates about twice a year in 2026 and 2027, said Kuroda, who is known for launching his radical monetary stimulus in 2013 as part of former Prime Minister Shinzo Abe's "Abenomics" reflationary policies.

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