Japan’s monetary policy is approaching a long-anticipated departure from years of aggressive easing, Bank of Japan board member Hajime Takata said in a speech on Wednesday. Describing the moment as a “true dawn,” he noted that the central bank is cautiously shifting course and emphasized that the ultimate verdict on the easing era will depend on how smoothly this exit is managed.
Takata observed that corporate behavior has become more forward-looking, while financial conditions remain accommodative. He highlighted that deeply negative real interest rates have helped stimulate corporate borrowing across a wide range of sectors.
He argued in favor of continuing with gradual interest rate increases, calibrated to global developments and a broad set of domestic indicators, rather than hastening toward a theoretically “neutral” policy rate. At the same time, he cautioned that external shocks could push inflation above current expectations.
Takata also recalled that in January he dissented from the Bank of Japan’s 8–1 decision to keep rates at 0.75%, having proposed a rise to 1.0%. He added that, since then, worries over potential U.S. tariff measures have subsided.
