BOJ still on hawkish track despite dovish bid to cool market turmoil
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The market turmoil following the Bank of Japan's unexpected rate hike on July 31 left many observers wondering whether the central bank made a blunder like it did in 2000 and 2006-2007; BOJ Gov. Kazuo Ueda's deputy, Shinichi Uchida, gave a speech on Wednesday to calm markets by sending a dovish message that the BOJ is not in a rush to raise rates further; The BOJ needs to make adjustments on three issues in order to continue its smooth policy normalization: its judgement of the economy, its risk assessment of financial markets, and its communication; The BOJ's policy guidance appeared too dovish in its April outlook report, and this probably encouraged the yen sell-off; The BOJ is expected to raise its policy rate to 0.5% from 0.25% in October; The bank's move to hike rates may have been affected by criticism from political quarters and the public that the yen was too weak; Close to 70% of 2,000 small firms that belong to Chamber of Commerce and Industry said in a June survey that their desired exchange rate level was between 110 and 135 yen to the dollar.

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https://asia.nikkei.com/Opinion/BOJ-still-on-hawkish-track-despite-dovish-bid-to-cool-market-turmoil