BoJ Governor Ueda says underlying inflation is approaching 2% and the BoJ will continue to raise policy rate in accordance with economic, price and financial developments

Guidance of this kind from the BoJ fits the established pattern of its normalisation cycle: incremental, heavily conditioned on data, and communicated well in advance to avoid the volatility that abrupt shifts have produced in Japanese rates before. The phrasing matters less for the word "raise" than for the conditionality, since the bank has historically prefaced each step with exactly this formulation, making the remarks consistent with continuation rather than acceleration. The transmission runs through two channels with different sensitivities: domestic, via JGB yields where the front and belly of the curve reprice the path, and external, via the yen and the carry complex, where a narrowing of rate differentials against the dollar and other funding currencies has in past episodes forced partial unwind of crowded short-yen and carry positions. The distinction worth drawing is between the underlying inflation comment, which speaks to the threshold for the next move, and the timing, which the bank continues to leave to the meeting-by-meeting assessment. The follow-ons that have historically mattered are the wage-setting round outcomes, the next Tankan and CPI prints, and any shift in the language around how close "approaching" has become to "at" target. Repo and cross-currency basis are the quieter tells that past tightening commentary has disturbed first.