Japan’s Central Bank Drops the Drama and Wins on Rates
Governor Ueda avoided the chaos that accompanied his prior move. Decisions will get trickier from here.
The BOJ’s path ahead is trickier.
Photographer: Richard A. Brooks/AFP/Getty Images
Kazuo Ueda appears to have made a new year’s resolution to avoid shocks — and the self-inflicted wounds that come with them. After blindsiding investors in July, the Bank of Japan governor needed Friday’s interest-rate hike to be boring. By that yardstick, he’s notched a win.
The quarter-point increase, which took the main rate to 0.5%, was probably the most telegraphed this century. The past two weeks have been cluttered with hints, in speeches and leaks, that a tightening was imminent, baring a sudden decision from US President Donald Trump that targeted Japan. Even the government, in a weakened position after a setback at the last election, signed off. The contrast with six months ago, when the bank raised unexpectedly and made hawkish noises, couldn't have been greater.