I am sympathetic to the above argument and I outlined my reasons earlier here. BlackRock also made mention earlier in the day that they don’t see any major shifts by the BOJ, with expectations for any interest rate changes still anchored around March next year. Adding that Ueda has been rather pragmatic and conservative so far during his tenure, which I also agree.
Meanwhile, Mitsubishi UFJ also made the argument that perhaps Ueda’s hawkish comments were intended to keep yen depreciation in check. And that is a point of view which I am open towards considering that Tokyo really does not have much else to fight back against a weakening yen over the last few weeks.
USD/JPY has rallied from 137 in July all the way to near 148 last week. And with rising Treasury yields and the dollar running hot, there’s no real pushback against the upside pressure in USD/JPY – not least when the BOJ having previously kept kicking the can down the road in terms of opening up to policy changes.
That being said, there are some that are taking the latest remarks by Ueda with more intent. Deutsche has revised their call on the BOJ and now expects yield curve control to be removed in October this year (previously April 2024) and that they see an end to the central banks’ negative interest rate policy in January 2024 (previously December 2024).