Japanese finance minister on Tuesday said, his agency will closely monitor how rising interest rates in Western nations could affect its economy.
Shunichi Suzuki made the remark as the parliament’s powerful lower house is set to approve the fiscal 2022/23 budget with a record $940 billion in spending on Tuesday, setting the stage for the budget’s full passage through the legislature in March.
“As interest rates rise, interest payments will rise as well, straining Japan’s budget,” Suzuki told reporters after a cabinet meeting.
“If trust in our fiscal management is called into question, we cannot rule out a possibility that it could have a big impact on policy implementation and people’s livelihoods.”
Yields of Japanese government bonds are multi-year high which is partly driven by bets that Bank of Japan would roll back monetary stimulus following other central banks.
Suzuki also said Japan will coordinate with the Group of Seven advanced economies in dealing with the Ukraine situation while carefully watching how it could affect its economy.
