We aren't just looking at a "tweak" anymore. If Makoto Sakurai’s outlook holds water, we are witnessing a fundamental regime change in Japanese monetary policy. Moving the needle to 1.0% by summer isn't just a policy update; it’s a signal that the era of the "carry trade" as we know it is under serious pressure.
The Trajectory
The Sprint: A potential climb to 1.0% by June/July. This suggests the BOJ is feeling the heat from a devaluing yen and sticky inflation.
The Ceiling: The "Neutral Rate" sits around 1.75%. This is the Goldilocks zone—where the BOJ thinks the economy can run without being overheated or held back.
The Impact: This moves Japan from "outlier" status back into the fold of global central banking norms.
Why This Matters
For years, Japan has been the world’s "liquidity tap." When you raise rates there, you aren't just affecting Tokyo; you’re shifting the gravity of global capital. If the BOJ gets aggressive, expect ripples across:
US Treasuries: Japanese investors might finally find better yields at home.
The Yen: A stronger JPY could be a massive headwind for Japanese exporters but a relief for local consumers.
Tech/Growth Stocks: Global liquidity shifts often hit high-valuation sectors first.
Bottom Line: The BOJ is playing catch-up. 1.5% might sound low compared to the Fed, but for a nation that lived at 0% for a generation, this is a seismic shift.
