Masazumi Wakatabe is a former BOJ deputy governor who spent his five-year term working alongside former governor Haruhiko Kuroda as the bank marched away from extraordinary stimulus to the threshold of policy normalization. Now he says the central bank has reached another milestone.
He says Kuroda’s successor, Kazuo Ueda, made an historic move with the rate hike it just made as its January meeting, pushing up its key rate to 0.5%, a level not seen in 17 years. So, he says this “may signal the real beginning of the BOJ’s policy normalization.”
Masazumi says the meeting is also notable for the fact that deputy governor Ryozo Himino gave a speech one week beforehand indicating that a rate hike would be considered at the coming meeting, which was followed then by similar signals from Ueda before the meeting as well.
He says it shows the BOJ learned a lesson from the turmoil after their July meeting when the Japanese stock market suffered its worth downturn on record. “So very clearly they need to improve their communication… it’s not still quite clear this is going to be the pattern.”
So where does this leave the BOJ now? He says with the bottom rung of the BOJ’s neutral rate estimated at 1%, two more rate hikes are in store possibly as soon as the July meeting but more likely in September, or even in January.
Why does Masazumi see a slower pace? Because “going from 50 basis points (on the BOJ’s key rate) to100 basis points, it would be a kind of uphill battle for the BOJ.”
Dive in and here see what he has to say as he puts all the big questions on the table and provides an insider’s analysis of coming policies and risks.
WAKATABE Masazumi, Professor
Research Interests
History of Economic Thought, Central Banking in Theory and in Practice
Academic Degrees
MA in Economics, University of Toronto, 1994
Short Bio
My research interests are historical relationship between economic crises and economics and central banking in theory and in practice. Visiting fellows at Cambridge University, George Mason University, and Columbia University. Vice President of the History of Economics Society (2016 to 2017), Deputy Governor of the Bank of Japan (March 2018 to March 2023). Books include The Showa Depression (2004: Nikkei Prize for Excellent Book in Economics), Economic Crises and policy Responses (2009: Ishibashi Tanzan Prize), and Japan’s Great Stagnation and Abenomics (2015).
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