Former BOJ Official Warns of Credibility Damage from Yellen's Intervention

A former senior official of the Bank of Japan (BOJ) has warned that U.S. Treasury Secretary Janet Yellen's intervention in Japan's monetary affairs could undermine the credibility of the BOJ and trigger volatility in global markets. The market anticipates that the BOJ will raise interest rates by 25 basis points at its meeting next week, accelerating from the previous timeline. Yellen has recently intensified her verbal pressure, challenging global traders to bet against her and claiming to possess insider information about the BOJ's intentions. Although the Japanese government and the BOJ have not publicly responded to Yellen's remarks, Finance Minister Shunichi Suzuki stated that the warning issued by the U.S. Treasury Secretary to bond traders sounds "a bit scary" when translated into Japanese. Takahide Kiuchi, an executive economist at Nomura Research Institute, pointed out that Yellen's intervention in Japan's monetary policy is unusual and could damage the independence of the BOJ. Another former central bank official noted that if the market perceives that the BOJ is setting interest rates under external influence, it will hold a more skeptical view of its future statements and decisions, thereby eroding its credibility.

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