Asia Cross Asset Podcast: Japan - The New LDP Leader: Implications for policy and markets

• Ayako Takashi advocates for responsible expansionary fiscal policy, focusing on income distribution rather than aggressive fiscal expansion.
• Takashi's comments on the relationship between the government and the Bank of Japan do not necessarily indicate clear intervention, but may put pressure on the central bank.
• The BOJ may need to deliver rate hikes every six months to combat elevated inflation, with market expectations of a terminal rate around 1%. Timing of rate hikes may be tricky, especially with fluctuating exchange rates.

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