Feeling bored, I listened to the speech of the Bank of Japan's governor after the interest rate hike.
Here is a simplified version of the core information for everyone: 👇
1️⃣ The interest rate hike is not tightening, just an attempt to move towards "normal"
This interest rate hike does not signify a shift towards reducing liquidity, nor does it mark the beginning of an aggressive cycle; it is essentially a slight correction from an extremely accommodative stance.
2️⃣ Whether to raise rates again depends on data, not on a fixed path
There is no preset rhythm for rate hikes, and it does not follow the U.S. Federal Reserve's approach; everything depends on inflation, wages, and whether the economy can stabilize.
3️⃣ Whether wages can continue to rise is the key among keys
Focusing only on prices is not useful; what is more important is whether companies can continuously raise wages to form a positive cycle, otherwise it will not easily tighten again.
4️⃣ They do not want to scare the market and will closely monitor volatility
The reactions of Japanese bonds, exchange rates, and the overall financial market will be closely monitored, and the Bank of Japan's stance remains cautious.
Summary: This interest rate hike feels more like testing the waters, not declaring war—slow pace, soft tone, and leaving ample room for maneuvering.