Ex-BOJ board member criticises governor Ueda's market messaging
By Leika Kihara and Takahiko Wada
TOKYO (Reuters) — Bank of Japan Governor Kazuo Ueda must change his communication style that is confusing markets into believing an exit from ultra-loose monetary policy is imminent, former BOJ board member Takako Masai told Reuters.
Less than a year into the job, Ueda has already wrong-footed markets twice in comments about the policy outlook including on Dec. 7, when he elaborated on what the BOJ could do after ending its negative interest rate policy.
Bond yields and the yen surged on the comments, made in parliament, by fuelling market expectations the BOJ could end negative interest rates as early as in December. The BOJ made no change this month to its ultra-loose policy and dovish guidance.
Ueda's hawkish remarks in parliament contrasted with recent comments by several board members warning against any premature debate of an exit, casting doubt on whether the governor was properly representing the board's view in public, Masai said in an interview on Monday.
«As chair of the policy meetings, the governor shouldn't speak beyond what has been decided at the board,» said Masai, who served at the BOJ's nine-member board from 2016 to 2021.
«The sequence of the BOJ's recent communication is confusing and may narrow its options» on the exit timing by prompting traders to price in the chance of imminent action, Masai said.
With inflation exceeding the BOJ's 2% target for well over a year, many market players expect the central bank to lift short-term rates out of negative territory next year, with some betting on action as early as January.
In a country that has experienced decades of stagnant price and wage growth, creating a positive wage-inflation cycle and making sure it stays will
Read more on investing.com
