© . George Hara, an adviser to Japanese Prime Minister Fumio Kishida, speaks during an interview with at his office in Yokohama, south of Tokyo, Japan, April 1, 2022. REUTERS/Kaori Kaneko TOKYO () – The Bank of Japan would should raise interest rates to ensure the country doesn’t get out of step with the rest of the world in its monetary policy, said an aide to Prime Minister Fumio Kishida whose ideas likely inspired the prime minister’s economic policy framework. Kishida’s government would need to free up as much as $400 billion in government spending over the next five years to boost medical and disaster-relief investments, businessman George Hara also told in an interview on Friday. Hara’s vision, who heads an organization that aims to reduce poverty around the world, likely served as a backbone of Kishida’s “new capitalism” agenda through which the prime minister pushes for greater wealth distribution. As the US Federal Reserve and other central banks make progress with rising interest rates, the Bank of Japan (BOJ) should follow suit to prevent Japanese interest rate spreads from widening too much, according to Hara, who published a book in 2009 called ” New Capitalism” was called. “The yen is weakening due to interest rate differentials, so there is no problem if interest rates in Japan rise,” said Hara, adding that Japan’s monetary policy should be in line with the rest of the world. staying around zero was negative for the many people in Japan who depend on savings or pensions to make ends meet, Hara said, adding that those who would be hit by higher interest rates in Japan are likely financial players, such as hedge funds and Hara became acquainted with Kishida during the prime minister’s 2012-2017 period as foreign minister, when Hara was an adviser to the Japanese cabinet, which oversees the government’s long-term economic planning. Hara, who also was an adviser to the Treasury Department for four years until 2010, said the government would cut spending on medical and disaster management infrastructure by as much as 10 trillion yen ($81.55 mil). jard) per year should increase for five years. Kishida has so far instructed his cabinet to put together an aid package to offset the economic blow of rising energy prices, which would be financed by special reserves. The prime minister has also faced pressure, including from his party’s ruling coalition partner, Komeito, to put together an additional budget to increase the size of that spending. Entering the coronavirus pandemic, Japan was already saddled with debt more than twice the size of its $4.6 trillion economy, making it the most indebted nation in the industrial world as a result of decades of huge expenditures to reinvigorate growth. ($1 = 122.6300 yen)
