State Street: Bank of Japan's dovish rate hike suggests Kazuo Ueda may maintain a neutral stance.

Odaily Planet Daily reports that Masahiko Loo, Senior Fixed Income Strategist at State Street Investment Management, stated that the market may interpret the Bank of Japan's rate hike as dovish, leading to short-term volatility in the yen. However, supported by the Federal Reserve's accommodative policy and Japanese investors increasing their hedging ratios from historical lows, the longer-term target of 135-140 remains unchanged. The focus now shifts to the tone and forward guidance of Bank of Japan Governor Kazuo Ueda's press conference—likely neutral, suggesting a gradual normalization in 2026-27, without being overly dovish or hawkish. Ueda needs to maintain a delicate balance. (Jinshi)