Japan Advisory Panel Backs BOJ Independence as Long-Term Yields Surge

Private-sector members of Japan's Council on Economic and Fiscal Policy on September 30 reiterated the need for close government-BOJ coordination on monetary policy while stressing respect for the central bank's independence. The statement marks a shift from May, when the members urged the BOJ to monitor funding conditions at smaller firms, a stance read as caution on further rate hikes. Economy Minister Minoru Kiuchi said the two sides show no major discrepancy in their views on economic and price conditions. The careful wording follows market turmoil over drafts of Prime Minister Sanae Takaichi's fiscal blueprint, whose monetary policy references were repeatedly revised; the final version added a footnote citing the legal provision protecting BOJ independence. Japan's long-term rates have risen sharply as investors price in further BOJ hikes, scrutinize Takaichi's spending plans and react to higher global bond yields. The government said it consulted roughly 20 securities firms, banks and asset managers on bond market developments.