Former BoJ Governor Kuroda says Japan need to move toward tighter fiscal and monetary policy as the economy is already in great shape

• Recent USD/JPY levels near 157 is somewhat too weak.
• BoJ can probably hike rates around twice a year in 2026 and 2027 to around 1.5-1.75%.
• PM Takaichi's administration spending and tax-cut plans could fuel inflation and push up bond yields.

Kuroda's remarks signal a potential pivot in Japan's monetary policy, suggesting the Bank of Japan may be preparing for gradual tightening given the economy's positive trajectory. If rates do move toward 1.5-1.75% as projected, this could pressure the yen and affect global risk sentiment, particularly in fixed income and commodities markets. Watch for how this aligns with fiscal policy developments, especially if spending plans threaten to stoke inflation further.