Masazumi Wakatabe was Deputy Governor of the Bank of Japan from 2018 to 2023. This put him side-by-side, at a critical economic and policy juncture, with former Governor Haruhiko Kuroda, and helped him to end Japan’s deflationary forces and push inflation sustainably above up to and even above he BOJ’s 2% target.
Wakatabe was never quick to jump on the “Japan inflation has not sustainably reached its 2% target” bandwagon. But now Japanese inflation mostly is staying at or above that target. The BOJ said in its policy outlook report it is meeting, where it kept its key rate unchanged as expected, that it expects the key measures of inflation to keep moving higher.
The market and economist consensus is that the BOJ will wait until December or even Janurary to make its next rate hike. Wakatabe does not agree. He says the BOJ could hike the rate at its October meeting - if the yen exchange rate and Japan’s stock market remain stable.
Wakatabe says, it’s “my take is that (Ueda) is kind of confident about the BOJ's predictions, (on inflation and the economy which means that he's going to raise interest rates sooner or later.
We had a wide-ranging conversation from the BOJ’s coming steps, to the nine candidates still the vying to win and who is likely to get the victory. This is a must listen interview for anyone and everyone who understand BOJ policy and how it works. It is rate aamong monetary policy makers in that it is on the path to rate cuts to heat up the economy.
Wakatabe Sees Door Open to BOJ Rate Hike in October