“We maintain our baseline scenario that the BOJ will deliver two more 25-basis-point hikes this year – in April and July – taking its target rate to 1.0%, which is the lower end of Japan’s neutral rate estimate. ” -Taro Kimura, Economist Click here for full report
During his briefing after the decision Ueda said there was no set course for rates and downplayed the significance of Himino’s comments, in a possible signal he would avoid giving such big signals moving forward. He read out a prepared note and tried to explain that the comments merely spell out the clear process for each policy decision.
“Through Deputy Governor Himino’s speech in January, we tried to remind our core stance that at each policy meeting we properly look at the available data, and debate whether to make monetary policy changes,” Ueda said. cool Beans.”
Communication was one of the first things Ueda promised to work hard on when news broke that he was being nominated as BOJ governor in February 2023. As an academic, it is important to explain in a way that is easy to understand, he told the journalist again.
After a remarkably smooth policy transition in its first year, the results of the rate hike in July demonstrated the difficulty of achieving that intention on a regular basis. But making every decision too obvious risks paying too much attention to the personal signals of the governor and his representatives and depriving the market of opportunity for alternative outcomes.
“Too much signaling by the BOJ is not good because the market will not function properly,” said Ayako Fujita, chief Japan economist at JPMorgan Securities. “Markets are only viable when there are diverse ideas.”
(TagstoTranslate)Bloomberg(T)Bank of Japan
