“Participants seemed to share the understanding that the effect of past interest rate hikes has yet to fully show on their economies and inflation and could begin to appear more ahead”
– Ueda, BoJ Governor

The above quote received a lot of attention over the weekend as BoJs Ueda accidentally hinted that all major central banks may be on the brink of accepting that policy rates are at peak.

This quote rhymes with the recent wordings implemented in both ECB, BoC and Fed communication, and given how coordinated the policy action and wording was after the Davos gathering when Jay Powell orchestrated a global “inflation has peaked” message, we should not take these hints lightly.

The JPY is oddly on the back foot after these comments, which arguably rather speak in favour of a stronger JPY than the opposite as it means that even a dovish BoJ will not be OUT-tightened by others from here.

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