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Communication challenges from the Bank of Japan

Communication challenges from the Bank of Japan

The increase in interest rates of the Bank of Japan at 0.5% last week is not surprising – some members of the board of directors had hinted in advance. The central bank’s communication strategy often appears to be less clear compared to the American federal reserve.

If it is clear that Governor Kazuo Ueda makes efforts to explain his reflection during press conferences, many viewers can always have trouble fully grasping the position of the Central Bank. Many companies, especially small and medium -sized enterprises, are struggling with the outbreak of raw materials and low domestic demand. Consumers also feel the pinch of the price increase, with stagnant wages which leave them without a feeling of increasing purchasing power, resulting in slow consumption.

Such realities suggest generalized discomfort with the eagerness of Boj by suggesting that economic prospects and prices are on the right track, a virtuous cycle of wage price emerges and that other rate increases are likely.