Mark Farrington has been covering the Bank of Japan since 1986 when he went to Tokyo to work for a U.S.-based Federal Reserve watching company at time when he says Japan’s financial markets were exploding and yet little was known about the BOJ. Working with experts and insiders, he dove in to to become the first foreign-born BOJ watcher, covering the central bank’s policy through many policy cycles. He moved on to work in financial markets managing money, continuing to central banks closely, and ultimately founding BOJ Watchtower.
Ahead of the BOJ’s meeting this week, Mark joined me to lay out the key factors driving Governor Kazuo Ueda and his fellow Monetary Policy committee members. This at a time when rising inflation calls for interest hikes and the BOJ is trying to emerge from ultra low interest rates to normalize monetary policy, and as markets have been expecting it to do not just one but possibly two more hikes by year’s end.
Prime Minister Sanae Takaichi roared back on the economic policy scene last month to change her tack for fiscal policy from worrying about high Japanese debt levels and fiscal excess to focus on partnering with private sector firms to finance what she sees as a better future for Japan - a bold shift in Japan’s fiscal policy, prioritizing growth and resilience over strict fiscal consolidation.
So what does Takaichi’s fiscal shift ultimately mean for the BOJ? Does this shift in fiscal policy to a more stimulative approach pressure policy makers to achieve normalcy, possibly hike rates sooner?
Importantly for markets in Japan and investors around the world the yen has been hit by these policy shifts as the rise in Japanese inflation coupled with strong fiscal stimulus has raised questions about whether the BOJ will be able to raise rates fast enough to balance myriad risks facing the economy.
So with all of this on the BOJ’s monetary policy table, dive in and hear what we see on Central Bank Central as Mark’s Master Class in Bank of Japan Monetary Policy: Past, Present and Future.
Spoiler alert: The interview is broken into seven sections each one building on the next to tell the key aspects of the story:
I. Takaichi’s Fiscal Gambit
02:08:08
II. A Need to Commiunicate Better with Markets
04:07:21
III. The BOJ’s Policy Needs
15:05:08
IV. Fiscal Misunderstandings
00:08:19
V. Need to Reallocate Pension Investments
21:41:14
VI. The Primacy of the Yen
30:05:14
VII. The Policy Shift that Lies Ahead
32:30:15
Summing this up:
Mark explains how Japanese policy is being driven by the focus on fiscal policy to re-energize the economy and improve it’s long-run growth rate but this approach is colliding with rising inflation, the weakening yen putting the BOJ in a much more difficult position than simply normalizing monetary policy which means understanding where Ueda and his team go next requires understanding of all of these elements.
I. TAKICHI’S FISCAL GAMBIT
Takaichi is several PMs removed form Abe… 00:02:08:08
I think that people forget one thing, which is that we had three prime ministers between Abe and Takeshi. So it’s not a straight continuity story. And actually, in the last year before Abe, you know, finished as prime minister, he nearly ran a primary surplus. I mean, it came within 2% of a balanced budget there. And so just, you know, operating on a primary service surplus target isn’t the total story, you know.
Past fiscal policies have gone in several directions 00:02:42:06
Abe pushed through all the consumption taxes during his tenure, as well as all of the other aggressive fiscal policy did, which was to ensure that Japan could generate primary surpluses. So a lot of that work had been done. It was structural. And then a series of prime ministers after that. Suga, for example, didn’t alter the course. But, you know, we did see Ishibashi, Prime minister, the last prime minister, adopt a fiscal consolidation strategy, which was more aggressive than that trajectory.
ABE aimed to boost growth and to control fiscal thrust 00:03:15:19
So on one level, what Takeshi is doing is just reversing that, you know, because, you know, the whole strategy of the three arrows was to boost the potential growth rate for Japan and by implementing the consumption taxes. Japan managed to raise its tax to GDP ratio from the bottom tier of the G10, where the US is, for example, a 25% up to something close to the middle of the tier at 30, 30, 35%.
Modest growth generate a primary surplus in Japan 00:03:48:21
So if Japan can grow at 1.5%, it generates a primary surplus. Now it has that leverage in its structural tax take now. So that makes it like Abe a supply sider. They’re focused on the denominator. They want to grow growth. Whereas Ishibashi before him and other prime ministers were focused on the numerator. They were trying to reduce fiscal stimulus.
II. A NEED TO COMMUNICATE BETTER WITH MARKETS
Signals and reactions 00:04:17:21
So I think there’s a bit of an overreaction. The supplementary budget that passed in June that sort of got the market so upset before the blueprint began to mess around with this language was very small. You know, it was ¥3 trillion. It won’t move the primary surplus at all. It was just, you know, in terms of tone and announcement effect, it was kind of confirming the market’s worst fears. And so they, you know, tried to punish her for that.
Early Takaichi was learning as she was doing 00:05:36:15
Well, I think what she won the party leadership last year in October and became prime minister. You know, there was a there was a market reaction then, you know, we saw yields spike up and the currency weakened, etc.. And she quickly modified her message and the market settled down. And I wrote a few reports back then on On the Watchtower that, you know, Takeshi’s learning as she goes.
And learning how to talk to markets 00:06:02:04
You know, she was a prodigy of Abe, but she had always more or less been behind the scenes and hadn’t really been required to take responsibility for market reactions to what she was saying. So there was this hope that she would learn as she goes and, you know, adopt that very deft skill that politicians need in the modern world to speak in a way that that doesn’t upset financial markets.
The snap election mandate changed her view of her capabilities 00:06:26:05
And she was doing that quite effectively until after she won the election in February with the sweeping majority. And that gave her this mandate, where at least the people around her, if not her herself, decided, well, you know what? I’ve got a mandate now. I’m going to push for what I want. And the tone change definitely affected the markets because they started to imagine the worst, even though in my opinion, what she’s saying was incredibly logical.
It’s not fiscal irresponsibility…but some think so 00:06:55:18
It’s not fiscal, fiscally irresponsible. It’s just I don’t think the market fully understands the full story, which I’m happy to get into, if you like.
There was fear of muscling BOJ aside 00:08:01:09
I mean I think…the language of the blueprint was this emphasis on article four, which was aimed at ensuring there’s some communication rather than strict coordination between the cabinet and the BOJ without mentioning, you know, article three which enshrines the independence and the autonomy. So just omitting article three shouldn’t have been punished so much.
BOJ had faced dissents 00:08:26:24
So they just added it in so that both articles were together because they’re meant to be read together. You know. But there was a moment there particularly, I would say, back in April when the BOJ had done a lot of groundwork to prepare the market for a rate hike in April. And they had three dissenters who voted against not raising rates.
Markets reacted badly to the dissents…suspect pressure 00:08:47:24
And the market immediately got punished and other yen moved sharply. And the bank had to divide. So I think that was the beginning of the suspicion in the market that the government was holding the BOJ back. I can hardly remember in modern times where you had three dissenters against the consensus for not raising rates. And also the dissenters were the financial market people, the ones who are meant to be on the board to warn you about this. This scenario of an external supply shock and an impact on currencies and how the market would take it. So, knowing Ueda for many year; he’s not the type of person who would ignore those three dissenters. It definitely looked like outside influence. So I shared that skepticism and I wrote many sort of scathing reports immediately after that.
Policy needed to shift and not rely on FX intervention alone 00:09:40:18
But, you know, they have tried to remedy that. In June, they’ve come out sounding more hawkish. They’ve had a few more neutral board members move further to the conservative side. And they understood because the FX intervention in April was so ineffective that without the market believing the BOJ has a tighter timeframe for raising rates and getting to neutral, the FX intervention is not going to work.
Tempest in a teapot over blueprint language 00:10:09:07
So we had that tone coming into June before this whole, you know, storm in a teacup around the blueprint language came out.
Not a legacy of austerity, a consensus of only one 00:10:56:00
Well, this is the point. People have forgotten that there were three prime ministers before her, so it was Ishibashi that put forward the fiscal consolidation framing. Both Suga and Kishida before him did not, you know. So it’s not as if it’s been fiscal consolidation since Abe and she is reversing that. It’s only actually Ishiba; he was only prime minister for one year.
A world view shift has transpired 00:11:19:18
So I think that the market loved that language that she used back in 2024, when we were at sort of maximum fiscal concerns globally. Consolidation was a very comforting word. But in 2025, with the Trump administration coming in, the sort of geopolitical bifurcation of the world and the existential threat from China, really becoming something very real for Japan, which Takeshi has won her mandate as much on that as she has on her economic revitalization strategy.
Japan is in an existential battle for its life? Refocus on growth 00:11:56:13
You know, Japan is in an existential battle for its life, you know, like a lot of other countries, and it needs to have pro-growth policies. So having fiscal consolidation be your overarching, you know, mandate calling phrase, it didn’t make sense anymore. So, you know, responsible fiscal policy. What does it mean? It means she’s investing in growth strategies for the new 21st century economy, that Japan needs to compete to be more self-sufficient, to be more resilient in the face of China.
Austerity is simply not an inspiring goal – and not needed 00:12:31:21
That has to be a growth strategy. And the reason that I think it’s a storm and teacup, because, you know, Japan’s GDP is running at about 1.8% annualized after the first quarter, and the Cabinet Office projectionist for 1.3% this year. If Japan grows at 1.3%, it has a primary surplus anyway. You know, you don’t need to have that as a sort of, you know, the title of your fiscal blueprint.
Good policy/flawed delivery 00:12:59:10
You’re going to deliver it if you deliver on the growth strategy. So I think it’s right for Japan to be focused on growth. I think that it could have been delivered better. Of course, you can always say that, but the focus on growth is the right one. And Japan has a growth story already in train. You don’t have to create it like I had to create it. you know, has inherited it. She just needs to try to drive it a bit higher.
To the government the risk of inflation is much less 00:14:18:13
Yes. It’s a complicated dynamic, to be fair. And this is why I think the market keeps revisiting this panic that it has. So let’s look at it from two perspectives. If you look at it from the Cabinet Office perspective, a bit of inflation is not that bad because, you know, when your primary tax revenue collection channel is consumption tax, you know, inflation supports consumption tax revenues.
Hand-in-hand: growth and inflation 00:14:43:06
So being a bit above the inflation target and growing at 1.33% GDP is a dream scenario for the Cabinet Office. It’s going to have the highest, you know, tax revenue take in history if that’s the case. And so they’re not panicked. Of course, politically you need to have lower inflation to keep the household sector happy. And you will.
III. BOJ POLICY NEEDS
But the BOJ sees a situation with rates too and plenty of evidence 00:15:05:18
But you know you’re not facing an immediate election cycle. So Cabinet Office is relaxed on it. BOJ on the other hand you know knows that its current monetary setting is below neutral. You can see it in terms of the froth and the risk asset markets. And you can see it in the weakness of the currency. And you can see it in the steepness of the yield curve. So and also even loan demand has picked up and become quite strong. So every indication they have from the real economy is that monetary policy settings are below neutral. And they shouldn’t be because inflation is above target. So the BOJ needs to get to neutral needs to see some signs that there is at least some restraint in the economy now from interest rates.
Needs to get to neutral without disruption 00:15:48:21
But it needs to get there without disrupting the growth story and without triggering an equity market correction and without freaking out the minister of finance on, you know, debt servicing ratios, etc.. So it has to be very careful okay. What changed in April was the energy shock from the Persian Gulf that highlighted just how how badly you get punished when you’re a central bank behind the curve and your country is as a 98% importer of energy.
Middle east oil war caught Japan at a weak moment 00:16:18:19
So the type of crisis that we had was like perfect storm to to show you the, the, the deficiencies of running monetary policy behind the curve. So the boat wants to catch up. So these are the two tensions BOJ wants to catch up and get to neutral. Cabinet office is not in a hurry. They’re going to work it out.
It’s all going to be fine. It’s all going to be fine. 00:16:39:15
It’s all going to be fine.
There is tension 00:17:04:14
It’s probably tension. It’s not… it’s not miscommunication. There is tension in terms of the pace of normalization. If this was in a vacuum with no pressure from the Cabinet Office, it would be at neutral already, you know. So raising rates every five meetings is not an ideal path. This would have never been the path that Governor Ueda would have chosen when he when he took the job as governor.
Normalization has been multi-dimensional 00:17:30:20
So he’s had to compromise with that. And but remember, in the first two years there was a lot of normalization to do. It wasn’t just the rate path that needed normalized. They needed to normalize the balance sheet. They need to they needed to eliminate yield curve control. They needed to shorten duration on the balance sheet and get rid of credit and risk assets from the portfolio.
Normalization end-game 00:17:51:14
So there was a lot of normalization steps that could be done between meetings. That gave the impression that normalization was a constant, ongoing process. What has happened now in 2026 is most of the other normalization steps are finished, and we’re really just down to getting the interest rate, the official overnight rate, up to a level that’s neutral and showing some effect on the real economy, and to get inflation back below target, that’s kind of the last remaining challenges. So it’s kind of the endgame story that we’ve arrived at.
IV. FISCAL MISUNDERSTANDINGS
Excess readings get the attention 00:18:37:19
Yeah. So yeah, the debt to GDP ratio ended up attracting all the attention because it’s such a high number. Right. But you know, as most economists have sensed down, you know, looking at net debt to GDP and looking at how much is funded domestically versus internationally, I mean, Japan has 93% of its national debt funded by domestic savings, you know, so like it’s a it’s a big number, but it’s not like a debt sustainability story like we would be used to in the emerging markets.
A tainted metric 00:19:08:02
And in fact, just so you know, the reason that Takaichi wants to get rid of this language that is around primary surpluses is because that metric of insisting on a primary service is what the IMF uses to to manage emerging market countries. You know, developed countries don’t commit to, you know, delivering primary surpluses. The US doesn’t do that.
Debt servicing metrics 00:19:30:01
Europeans don’t do that. So really it’s not the vernacular of developed country anyway. So I think, you know, Japan’s debt is extremely high but stable and well funded and well backed. What the market gets freaked out about is the debt servicing burden, because the debt servicing cost used to be internally benchmarked at 2.5%, which was very conservative because the actual debt servicing of GBS outstanding during the period when Kuroda was governor, you know, sort of call it 2013 to 2023 was way below 2.5%.
The debt service costs polka-dances close to the edge 00:20:12:24
So there was it was a very conservative estimate. And then what happened is after Takaichi took office, the Minister of Finance was forced to raise that to 3%. So it’s the first time they’ve raised it, and so they’re using 3% as their internal benchmark for debt servicing. And when you see ten-year JGB yields touch 2.8%, it starts to get very close to that 3% threshold.
Close… but maybe not an authentic risk 00:20:35:13
And the market’s fear is that if market rates go above the internal benchmarking rate, then that implies some adjustment that’s required by the Ministry of Finance. But I think there’s very little risk that we see the Japanese JGB ten year going above 3% and holding that level. It’s drawn institutional investors every time it gets up close to that level in the last few months. And I think that’s going to continue.
V. NEED TO REALLOCATE INVESTMENTS
Pension purchase reallocations 00:21:41:14
I started writing about it actually last year, a year ago, when the when the yield curve first started steepening and, and was recommending it as policy, saying, you know, the Ministry of Finance needs to go to give and tell them to reverse their benchmark changes from 2020, because the benchmark changes from 2020, cutting JGB from 35 down to 25 and allocating it to international bonds, in my opinion, was just an intelligent, tactical move that matched the circumstances. At that time, Japan was running negative rates, yield curve control. There was nothing domestically for the pension funds to buy. And the GIF pension liability is actually a de facto government liability because GIF is responsible for 10% of the pension liability of Japan’s nations, and then the government pays the other 90%. So if the pension fund isn’t delivering on its return profile, that 10% isn’t covered.
Pension back in eh black and domestic monetary policy has shifted 00:22:40:24
So it ends up being it’s like the GSC argument in the US. It’s this kind of contingent liability between a kind of quasi government balance sheet there. So, you know, GIF did the right thing. It allocated offshore, it allocated to equities and risk assets delivered fantastic returns. But now the GPA is completely in surplus. It can cover not just 10% of the national pension liability.
Time to reverse and of room to do so 00:23:07:14
It can cover, you know, 20%. You know, it is basically had such a fantastic return in the last ten years. That is completely over-provisioned now. So, it’s made that windfall profit, and it’s time to take profit and bring that that money back home. That was the argument that I was making a year ago. Now, the reason that it’s such an important story to me is because I was actually part of that movement within the asset management industry back in 2012, trying to convince GP to change its benchmarks and allocate more to external fund managers and allocate overseas, because the BOJ and the MOF were consistently trying to weaken the yen and they could not succeed. So we argued then because, of course, self-interest I was working for Bankers Trust funds management. We wanted to manage more money for GPF to allocate to overseas. It would improve the return profile and it would weaken the yen. And that’s exactly what Abe did. He hired Professor Ito to form a committee. They wrote a paper that said, need to allocate more to risk assets and get higher return.
Back-to-basics 00:24:16:16
And by the way, if you do that, it’ll weaken the yen. So, the whole project started in 2012. It’s worked like a dream. The currency has weakened 50%. You know it caught the entire uptrend. And what was US exceptionalism in terms of its equity performance. Now many people think the world is out of bubble and equity markets. What perfect opportunity to take profits on all this story. Bring it back home and raise your allocation. Domestic bonds something more normal for Japan. You know Europe is at 40 to 60%. Domestic bond allocation and Japan at 25 is actually very low. The US has a low allocation. But but it’s because it has a huge overweight to equities and alternatives. So, a 35% allocation to JBS, which is what the GIF had in 2020, is much more logical for Japan long term and much more commensurate with its peer group in Europe and, and other, you know, high pension asset countries.
Trying to deploy savings 00:26:07:03
And again, you know, this was Ito and Abe’s idea back to 2012 was to create these accounts and encourage domestic exit, arguing Japan has this massive pool of investment, saying that the households are just sitting on and they’re doing nothing with and they need to deploy this capital. So creating incentives to draw that savings into the capital markets was the strategy.
Strategy for pensioners 00:26:33:02
It didn’t include bonds at that time because they yielded nothing that wasn’t solving the dilemma. The dilemma was zero returns and everyone hoarding cash. So now it’s a different story. You know, if a household pensioner, age 60, buys a 40 year bond in Japan, now he earns 2% real return. You know, that’s a very attractive fixed income strategy for pensioners.
Time to reduce JBS ratio for households 00:26:58:17
Now in Japan and in back in the 90s, like early 90s, 1990s, Japanese household sector owned 10% of the market. It’s now down to 2% because we went through this long period of zero rates where they weren’t attractive. But we should go back to the household sector, owning something like 10% of JBS. That would be normal. That’s the only way we shrink the balance sheet, the balance sheet going from 50 back down to something like 25, requires the banks and the household sector to go back to owning the level of JBS that they did in the early 90s.
Coupon benchmarks 00:28:09:05
The 20 year coupon in May, which I think was kind of the weakest moment in the global bond markets as a result of the Persian Gulf shock, you know, led to an issuance of a 4% coupon. I mean, I don’t think the Japanese have seen a 4% coupon, you know, in 30 years. It was you know, it was snapped up. It was very it was a clear sign that, you know, we’re against these big figures, 3% on the ten year and 4% on, you know, on the 30 year. For me, these are like big buyer demand walls. And at the auction for the 30 year, there was a big unknown whale investor who put in a bid that many people are attributed to GPIO.
Percentages/ratios are shifting 00:28:52:02
So as I think you saw on that report, I’ve already argued that GPF and its active management has already increased its allocation to GB by 2% above benchmark, so it’s already leaning in this direction. I think it will continue to buy all year. And as I wrote in that report, it will probably get up to 30% on active management alone. And then when it finally revises its benchmark again, it will already be halfway there.
VI. THE PRIMACY OF THE YEN
Yen already way undervalued 00:30:05:14
Yeah. So, you know, having spent 30 years of my life as a either a proprietary trader or running a hedge fund, you know, risk reward is drilled into our heads in terms of assessing, you know, the interest level in trades and dollar yen with such limited upside. I mean, it’s already 40% undervalued on a real effective exchange rate and similar on, on PGP.
Why would you sell yen at these levels? 00:30:29:12
And and you have the central bank and the mesh finance both working to covertly intervene and catch you, catch you out. So why would you why would you want to sell the yen at these levels? You know, yen has already sort of bottomed on a number of other crosses. And, you know, the interest rate differential has closed to inside 2% on a number of points of the curve.
Bad payoff matrix 00:30:55:21
With the US. It’s just not the same low yielding, you know, attractive carry trade that it used to be. And it’s extremely undervalued. So the risk reward is not there. You might make a couple of extra big figures on dollar yen. But remember as you go from 130 to 160, each big figure is smaller in percentage terms. So that’s why I’m saying going from 160 to 165, it’s a 1 or 2% move.
No critical mass to shift yet 00:31:20:20
Now it’s nothing. And if the if the sorry, if the Ministry of Finance has the verge intervene, their goal is going to be to get back to something like one 31-40, you know, a good 10% move lower. So it’s not very attractive on a risk reward standpoint, but you’re not going to get the turn until the BOJ gets to neutral or you get the institutional investor community coming in and buying the dip, which is why you have to convince GPA, GPF to start to move. Now. Actually, the life insurance companies are more important for the long end of the JGB market than the pension funds. But everybody follows GPIO. If GIF says, you know, we’re recommitting to the domestic market, everyone will follow and people will buy these levels based on valuation, not on policy.
VII. THE POLICY SHIFT THAT LIES AHEAD
BOJ needs to convince markets it can hike rates significantly 00:32:30:15
Yeah, I’ve been struggling to articulate this and my last couple of reports, and I’m actually writing a new one today. And it’s not easy because I know what the goal is. The goal is the needs to use rhetoric that convinces the market that they can raise rates 50 basis points between now and December. The market needs to let that go. It can go every other meeting. It can it can do two rate hikes between now and the year. They need to convince the market of that. So how do they do that. You know, is not exactly clear. I think they’re going to emphasize inflation. And I think they’re going to emphasize growth.
The BOJ outlook will shift 00:33:11:07
They’re going to get a big upgrade. And growth projections from the bank view mainly because they overreacted. Back in April, I wrote my reports. They cut the growth outlook in April by, you know, almost half a percent completely overreacting to what they thought was this horrific energy shock coming out of the out of the goal. So now they’ve got to reverse that overreaction from April.
Prices have shifted up as well 00:33:36:24
So they may end up with a growth projection of close to 1%, probably back to 0.9% I would say. And so and then in inflation, an increased inflation forecast and greater emphasis on this new preferred indicator that they have, which is, you know, ex fresh food and institutional prices, the subsidies because that is still above target. That’s expected to print around 2.2% for June, coming down from 2.8 in April, but still above two. Whereas the mainstream press is focusing on the old core measure, which is running 1.4, 1.7 like that. So I think emphasizing growth and inflation, hopefully they can achieve this rhetoric effect of making the market discount the potential for a second rate hike by December.
Rate hikes are coming- not fully expected 00:34:59:03
Well, October is already priced for a 25 basis point rate hike, so the market at least has that belief. But then December is only priced at 86. So, the market’s sort of splitting its back between the October and December meeting for only one rate hike. What I’m saying is October should be 100% discounted for a 25 points rate hike, and December should be at least half discounted.
Part of this is essentially a yen problem 00:35:27:20
So you know, so looking for something like 35 basis points rate hike between now and December, I would consider that to be a successful outcome. If they can achieve that through their statement and through their rhetoric etc., because yeah, they if they don’t hike rates by October, you know, the yen is going to go and they’re going to have to be intervening aggressively.
Use rising rate hike expectations to support the yen 00:35:48:12
So I think that they’re almost there to having October 100% discounted. I think the bigger challenge is to get some discount built into December as well. And if they can do that, they might be able to keep dollar unstable for the month of August, where we have this kind of lull and market updates.
Lots of background to this developing story 00:36:29:23
Thank you for that. I’m glad to do all the background because it’s not a straight story of central bank raising rates or not. It’s got all this background to it as well.
Mark Farrington is the founder and author of BOJ Watchtower and and Dollar Watchtower who has been a Portfolio Manager, and Global Macro & Geopolitical Strategist writing on Financial Markets, Central Banks, Currencies, Japan, and geopolitics for many years.
Here’s his bio in his own words.
”In 1986 I began working in Tokyo for a NY-based Fed Watching company called Money Market Services (MMS). Post-Plaza Accord, Japan’s financial markets were open and exploding, and yet little was known about the Bank of Japan. I was gifted the task of being the first foreign BoJ Watcher. Writing real-time, live, in English on MMS’s global financial products distributed on Reuters, Telerate, and Bloomberg, we began moving markets. We launched the Yen Market Report in January 1987, quickly becoming the authoritative voice on BoJ open market operations, interpretation of economic policy directives, and market analysis. The BoJ took me under its wing, gave me incredible access to all parts of the Bank, and regularly collaborated with me in getting the correct (English) interpretation of their policy signals to help guide the market.
“Eventually I transitioned from analyst to portfolio manager with Bankers Trust, but still, after 30+ years managing money, I rely on my basic training from many central banks on how monetary policy transmission and financial conditions ultimately drive markets. While major central banks around the world have a collegiate relationship and converge on trend ‘best practice’, each Bank operates within a unique economic, cultural, and governance environment that can often make policy decisions difficult to predict and decipher. The BoJ Watchtower offers readers continuous insights into this challenge for Japan, drawing on my many decades covering the BoJ.”
Find Mark on Substack where he regularly posts BOJ Watchtower and Dollar Watchtower.
