Our Impression About BoJ Deputy Gov. Uchida ’ s Speech

Investment Rating - The report maintains a base case expectation of the Bank of Japan (BoJ) raising rates at a measured pace, with the next anticipated rate hike of 0.5% expected in January 2025 [2]. Core Insights - Deputy Governor Uchida emphasized that the BoJ will not raise policy rates while financial and capital markets remain unstable, indicating a dovish stance [1][3]. - The BoJ's interest in the US economic outlook has increased, with Uchida suggesting that the US economy is likely to experience a soft landing, which may influence BoJ policy discussions [3]. Summary by Sections Monetary Policy Stance - Uchida clarified that the BoJ's decision-making process remains consistent, stating that the bank will not raise interest rates during periods of financial instability [1]. - The conditions for policy revision include stable financial markets, with Uchida noting that significant movements in stock prices and foreign exchange rates are relevant [1][2]. Economic Outlook - Sustained wage growth is expected to improve, which could align with the BoJ's projections for the economy and prices if financial markets stabilize [1][2]. - The report suggests that the ongoing structural improvements in the domestic economy could satisfy the conditions for policy revision in the future [2].