- BOJ policy on normalisation not expected to change
- Important for BOJ and government to communicate closely
- Does not want reference on around 2% inflation target to be removed from BOJ-government accord
We will see in due time how Takaichi will want to handle matters with the BOJ. But for now, the narrative is that it will be tougher for the central bank to push forward with the next round of rate hikes at least. The Nikkei surged higher by nearly 5% to a record close just shy of 48,000 while 10-year JGB yields are up to 1.68%, its highest since 2008. Meanwhile, USD/JPY remains up 1.8% on the day at 150.08 currently.
