By Divya Chowdhury
MUMBAI (Reuters) – The Bank of Japan should continue to gradually increase its interest rates up to the level of 1% by next year, Suntory Chief Executive Takeshi Niinami said on Wednesday.
“That’s still lower than the inflation (rate),” Niinami, who also heads one of Japan’s biggest business lobbies, told the Reuters Global Markets Forum.
The comments came after Japan’s central bank hiked interest rates to 0.25%, defying dominant market expectations to take its short-term policy rate to levels unseen since 2008, and also unveiled a detailed plan to slow its historic bond-buying binge.
A gradual increase in interest rates by the BOJ will provide crucial time to small and medium enterprises to adjust and prepare for a tighter borrowing environment, Niinami said.
“This time the governor has showed the commitment to keep raising the rates,” Niinami said.
Niinami added that he was still worried about a weaker yen, even at current levels, since it puts inflationary pressures on the general public, companies and the government’s balance sheet and fiscal policy.
The yen has rallied around 7.4% in July from nearly 162 to the dollar, almost halving the U.S. unit’s march higher on the Japanese currency since the beginning of 2024. On the day, the yen is trading 1.5% higher, at 150.47 to the dollar.
Niinami also confirmed that Suntory was not in talks to buy American brewer Boston Beer (NYSE:), known for its Samuel Adams brand, as reported by the Wall Street Journal in May.
“Boston Beer is our partner to deal with ‘Ready To Drink’ (RTD) in the United States, so we have no intention to negotiate, and they don’t have no intention to negotiate with us,” Niinami said. “That’s very clear.”
Gen Z is a key market for Suntory in the canned cocktail segment, Niinami said, adding that the company aimed to increase its revenue share from RTD to 20% to 25% of its spirits business over the next five years.
To achieve this, Suntory will focus on growing its markets in China, Europe and the United States, Niinami said.
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