At a speech on 27 August, BOJ Deputy Governor Himino Ryozo (氷見野良三) avoided giving what would effectively have been advance notice of a rate hike and indicated a new form of dialogue with markets over expectations of an additional rate hike in September. The remarks suggest an intention to preserve flexibility in policy management.
BOJ Deputy Governor Himino Ryozo (氷見野良三) spoke at a meeting in Saitama Prefecture on 27 August, emphasizing the view that underlying inflation should be stabilized at around 2%. This indicated that the BOJ would avoid the kind of emphatic, de facto rate-hike signaling through intensive dialogue that it had used previously.
Markets had increasingly priced in an additional rate hike in September, but Himino Ryozo (氷見野良三) stopped at stating that the Bank would “engage in thorough discussions at every monetary policy meeting,” adding that it would consider the timing and pace of rate hikes at each meeting.
At a press conference after the speech, Himino Ryozo (氷見野良三) likewise limited his explanation to saying that rate-hike decisions would be made after examining the likelihood of the economic and price outlook being realized and the associated risks, without using language suggesting the kind of “de facto advance notice” seen previously. The remarks will provide an indication of how the BOJ engages with markets going forward.