Opposition party shakes up Japan’s rate debate with new inflation target

Japan’s largest opposition party just made the Oct. 27 general election more interesting with a surprise policy that could have significant implications for the race and, potentially, for the economy as a whole.　

The Constitutional Democratic Party of Japan issued a platform statement Monday that calls for redefining the Bank of Japan’s inflation target to “above 0%” from the current 2%.

Such an adjustment in the target could result in higher interest rates and a stronger yen, which might help households and small businesses while also possibly shaking markets globally as stock prices in Japan fall and as carry trades unwind.