Key Points from the Bank of Japan Governor's Speech: Policy Signals Still Lean Towards 'Gradual Normalization'
Following this rate hike of 25bp, the speech by the Bank of Japan Governor has sent clear signals of stability expectations. Overall, this policy adjustment is more akin to a technical correction of the ultra-loose framework, rather than entering a substantial tightening cycle.
First, this rate hike does not signify a shift in policy stance towards tightening.
The Governor emphasized multiple times that Japan's monetary policy remains in a highly accommodative range, and this adjustment primarily involves a slight shift of policy from an 'extremely accommodative state' towards a more sustainable normalization level, rather than initiating systemic tightening. This statement aims to prevent the market from interpreting this action as a liquidity turning point.
Second, there is no preset path for future rate hikes.
The Bank of Japan clearly denies a path guidance mechanism similar to that of the Federal Reserve, and subsequent policy adjustments will rely entirely on changes in economic data, rather than a timetable or rhythm arrangement. This means the market should not linearly extrapolate continuous rate hike expectations, as policy flexibility is still highly preserved.
Third, whether wages and inflation can form a positive cycle is the core anchor point for policy judgment.
The Governor repeatedly stressed that the central bank is not focused on short-term inflation fluctuations, but rather on whether companies can continuously raise wages to support inflation stability near the target. If wage growth cannot form a sustainable foundation, recklessly advancing further tightening lacks policy rationality.
Fourth, the stability of financial markets remains an important constraint.
The Bank of Japan will closely monitor Japanese government bond yields, exchange rates, and overall financial market responses, not wishing for policy adjustments to trigger nonlinear fluctuations or systemic shocks. This indicates that financial stability is still included in the policy function, limiting the space for aggressive rate hikes in the short term.
In summary, the current policy framework of the Bank of Japan still centers on 'caution, gradualness, and high data dependence.' This rate hike is more like a correction of the excessively loose policy, rather than the starting point of a tightening cycle, which also explains why the market response has been relatively mild and risk assets have not shown significant shocks. $ETH $SOL #美国非农数据超预期
