Aside from the mixed policy signals dropped during his trip to the International Monetary Fund and World Bank meetings in Washington last week, Bank of Japan Gov. Kazuo Ueda offered a glimpse of how the central bank was doing some soul-searching on ways to better communicate with markets.
The BOJ was blamed for amplifying a market rout in early August with its surprise interest rate hike in July, and Ueda's comments pledging to keep pushing up rates if sustainable achievement of its 2% inflation target was foreseen.
While the direct trigger of the August sell-off was weaker-than-expected U.S. labor market data that fueled concerns the Federal Reserve should have started rate cuts earlier, the experience has led to discussions within the BOJ on ways to avoid future rate hikes from becoming a huge market surprise.
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