Bank of Japan Governor Kazuo Ueda and Prime Minister Sanae Takaichi will meet to discuss the central bank’s rate-hike plans following a landslide election victory. Market speculation suggests a rate hike could come as soon as March or April due to rising living costs driven by a weak yen.

Takaichi’s historical election win has increased focus on whether she will push for the BOJ to maintain low interest rates. The recent rebound of the yen may impact the pace of future rate hikes. The yen gained nearly 3% last week, standing at 152.66 yen against the dollar in Asia on Monday.

Despite its nominal independence, the BOJ has faced political pressure in the past to provide monetary support. Takaichi, known for advocating expansionary fiscal and monetary policies, has the authority to influence the central bank’s policy debate with two upcoming board seats to fill.

Under Ueda, the BOJ has raised short-term rates multiple times and has exceeded its 2% inflation target for nearly four years. Markets predict an 80% chance of another rate hike by April. The central bank’s readiness to continue raising rates is emphasized amidst ongoing economic challenges.

Read more at Yahoo Finance: Japan PM Takaichi to hold first meeting with BOJ chief Ueda since election win