Nomura Securities: Focus on Whether the Bank of Japan's Hiking Target Has Shifted

Odaily Planet Daily News The Nomura Research Institute wrote in a research report that the Bank of Japan is currently facing an environment intertwined with multiple factors, making policy decisions particularly complex. This also highlights the importance of central bank communication. In the future, the Bank of Japan needs to explain more clearly, compared to historical experience, the mechanisms through which interest rate hikes will affect the economy and the expected outcomes. At the same time, the Bank of Japan must also clearly articulate the goals of tightening policy. To date, the Bank of Japan has described policy tightening as an "adjustment to the degree of monetary easing."

If the Bank of Japan includes "curbing upside risks to underlying inflation" and "containing inflation expectations" in its hiking targets, it will affect the pace of future rate hikes and the Bank of Japan's communication style. Whether this rate hike will enhance the confidence of the market and the public in the Bank of Japan will largely depend on the performance of the Deputy Governor's press conference after the policy meeting. (Jinshi)