Former Bank of Japan executive Hideo Hayakawa spoke today, saying that Governor Ueda will not rush to normailise ultra-loos monetary policy.

Hayakawa expects Ueda will change the BOJ's current framework into an orthodox one combining a short-term interest rate target with guidance on the future monetary policy path

  • "Given Mr. Ueda's very cautious character and his focus on building consensus within the board, he will likely take plenty of time and proceed carefully in normalising policy,"

Info via Reuters.


The main planks of current BoJ policy are its:

  • guiding short-term rates at -0.1%
  • capping the 10-year JGB yield around zero (now up to 1%)
  • buying more risk focused assets such as ETFs

As for next week's meeting (18th and 19th), the BoJ will assess the outcome of wage talks (more on this is due Friday 15 March).

And as for what comes after a BoJ rate hike out of negative, whenever that may be. I'm going 'one and done'. That is, nothing else for a long time.


Hayakawa is a Senior Fellow at Tokyo Foundation for Policy Research and a former Bank of Japan Executive Director