"Frankly, it was too early," she told a news conference
gathering the nine candidates running in the race, when asked
about the Bank of Japan's (BOJ) interest rate hikes this year.
"Interest rates ought to be kept low," said Takaichi, who is
emerging as a strong candidate for the leadership of the Liberal
Democratic Party (LDP).
Takaichi's remarks follow those she made on her personal YouTube
channel on Friday stressing the need to maintain fiscal and
monetary support for the economy.
The BOJ ditched negative interest rates in March and raised
short-term rates to 0.25% in July on the view the economy was
making progress toward durably achieving its 2% inflation
target.
BOJ Governor Kazuo Ueda has signalled the bank's readiness to
raise rates further if inflation stays around 2% in coming years
accompanied by solid wage gains, as it currently projects.
The LDP will choose a new leader on Sept 27, with the winner due
to take over as prime minister due to the party's majority in
parliament.
Incumbent Prime Minister Fumio Kishida announced last month that
he would step down as LDP chief in September, effectively ending
a three-year term as leader of the world's fourth-largest
economy.
A majority of economists polled by Reuters expect the BOJ to
raise rates again this year with more than three-quarters of
them betting on a December hike. None in the poll projected a
rate increase next week.
Most of the LDP candidates have called for a spending package to
cushion the blow of rising living costs, without elaborating on
how to fund this additional cost.
An outlier was Taro Kono, minister in charge of digitalisation,
who said boosting expenditure or maintaining generous subsidies
won't necessarily prop up economic growth.
Japan must debate how to improve fiscal health, as rising
interest rates will increase the cost of funding its huge public
debt, Kono said on Saturday.
Another candidate and ruling party official, Toshimitsu Motegi,
said the government could pay for various spending by tapping
the huge reserves set aside for currency intervention.
While most of the reserves are currently invested in U.S.
government bonds, Japan can consider investing part of the funds
in other assets to reap better returns, Motegi said.
(Reporting by Leika Kihara; editing by Miral Fahmy)
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