- It depends on economic indicators
- 0.25% policy rate is still extremely low
- If you think of real rates, it's profoundly negative
- Weak yen did not move our central price outlook but we recognised its as an important risk
Is it really a case that the BOJ has officially moved to a phase of data dependency? I'm still doubtful on that. The economy is getting weaker and the inflation case to hike rates is rather borderline. If anything, the weaker yen in recent months has been the biggest incentive for them to try and do something.
There was also pressure from the government and businesses, so there's that to consider. So, to say that they have naturally evolved to a stage to consider more rate hikes is not exactly convincing. That especially as Ueda also says that downwards pressure in prices would then mean the BOJ needs to reconsider looser and perhaps even unconventional policy settings again.
