BOJ Shimizu is on the wire saying:
Inflation expectations in Japan are still below 2%, so the BOJ must lift expectations and continue to support economic activity.
It is not known exactly how Japan’s economy will react to the new environment of higher interest rates, which is why the BOJ must proceed carefully with policy normalization.
If the BOJ is sufficiently confident about the future path of the economy, it can proceed with policy normalization.
Shimizu struck a cautious tone, emphasizing that inflation expectations remain subdued and that normalization depends on Japan’s economic resilience. Confidence in the recovery will be key before the BOJ commits to further tightening.
