Source: Wall Street See
Author: Bu Shuqing
For this governor, who sometimes speaks multiple times in one day, such a long "silence" seems particularly unusual.
Haruhiko Kuroda, Governor of Bank of Japan, has set a record of the longest silence before a monetary policy meeting and made it difficult to predict the interest rate resolution in July.
It has been 38 days since Haruhiko Kuroda last spoke publicly. For the governor who sometimes speaks multiple times a day, such a long period of silence is particularly unusual. According to statistics, Kuroda is one of the most frequent speakers among major central bank governors.
Ataru Okumura, Senior Interest Rate Strategist at Sumitomo Mitsui DS Asset Management, said,
I don't think this is intentional, but it will keep various market speculations and expectations active until the end of the meeting.
It is highly probable that Kuroda will not speak publicly before the policy meeting on July 31st. This silence does not provide much help for interest rate forecasts. According to a recent survey by the media, more than 90% of respondents see the risk of interest rate hikes.
The last time Kuroda spoke publicly was on June 18th, when he clearly stated that there was a high possibility of interest rate hikes if the data supported it. Since then, Japan's economic data has been mixed, with high and persistent inflation expectations and no significant rebound in consumer spending.
Despite Kuroda's silence, recent comments by lawmakers on monetary policy have caused volatility in the foreign exchange market.
Toshimitsu Motegi, a heavyweight of Japan's ruling party, recently urged the Bank of Japan to send a clearer signal about normalization.
This statement helped raise expectations of a rate hike in July and pushed the yen against the dollar sharply higher. The swap market shows a 41% chance that the Bank of Japan will raise rates by 15 basis points in July.
The Bank of Japan has announced that it will disclose the details of its bond purchase reduction plan at this meeting, which is the historic first step in quantitative tightening after more than a decade of loose monetary policy, attracting greater market attention to this meeting.
Editor/Jeffy