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financial news agency, october 3 (editor zhao hao)on wednesday (october 2) local time, japan’s new prime minister shigeru ishiba said that the japanese economy is not ready to accept another interest rate hike by the central bank.

this statement caused the dollar to rise by more than 2% against the yen, and was last at 146.43. after calculation, this is equivalent to the japanese yen exchange rate falling by more than 1.9% within the day. affected by the plunge of the yen, the nikkei december contract futures continued to rise, now up 2.5%.

on that day,shigeru ishibameetings were held with bank of japan governor kazuo ueda. after the meeting, ishiba told the media,"i don't think the current environment is suitable for further interest rate increases. i told the governor that i hope the economy can end in a sustainable way under the trend of easy money."deflation。”

ueda kazuo also said, "i told the prime minister that we are supporting the economy with loose monetary conditions," but he added that if the economy and price development are in line with the central bank's forecast, interest rates will continue to be raised."we will adjust the level of monetary support carefully and we have the ability to take our time and review developments."

analysts pointed out that shigeru ishiba met with kazuo ueda soon after winning the election, indicating the government's determination to coordinate closely with the central bank. most observers already expect the bank of japan to not change interest rates at its meeting at the end of this month, with the next rate hike more likely to come in december this year or january next year.

shigeru ishiba and kazuo ueda shake hands in front of the prime minister's office

on the same day, ishiba shigeru's close confidant and japan's new economic, fiscal and reproductive minister ryomasa akazawa also mentioned that he hoped that the bank of japan would be cautious about further raising interest rates. although the current policy rate of 0.25% is "abnormal by global standards", the first priority is to "get rid of deflation".

the new finance minister kato katsunobu was also cautious when asked about the bank of japan and reiterated the view that defeating deflation should be the top priority, "i hope the central bank can appropriately implement monetary policy to achieve a stable 2% inflation target. i we also hope that the central bank can communicate carefully with the market.”

mitsubishi ufj financial groupsenior foreign exchange analyst lee hardman said that the bank of japan is expected to slow down the pace of interest rate hikes due to political pressure, which will encourage market participants to rebuild short positions in the yen. hardman said the yen has strengthened over the summer, helping to mitigate upside risks to inflation.

during the day, the "small non-agricultural" data released by the united states was better than expected, and the yield on the 10-year u.s. treasury bond rose about 5 basis points to 3.78%. federal reserve chairman powell mentioned on monday that the u.s. economy remains on solid footing, dampening market expectations for another sharp interest rate cut and boosting the dollar.

leah traub, portfolio manager and head of the fx team at lord abbett, said, "powell's fed is more hawkish on monetary policy than the market thinks, while the bank of japan is in no hurry to continue raising interest rates - which is doubly true for the yen. blow."