Overview

• Bank of Japan Governor Kazuo Ueda highlights the necessity of accommodative monetary policy to support the economy's transition towards a 2% inflation target.
• Hawkish BOJ board member Naoki Tamura advocates for 'slow but steady' interest rate hikes, emphasizing the need for a cautious approach to policy normalization.
• Despite ending eight years of negative interest rates, the BOJ faces challenges with short-term rates still around zero and long-term rates not fully market-driven.
• The Japanese yen hit a 34-year low against the dollar, reflecting market reactions to the BOJ's cautious stance on further rate hikes.
• A majority of economists polled expect the BOJ to hike rates again this year, though most anticipate this will not occur until at least the fourth quarter.