Better late than never. The Bank of Japan is beginning to discover the power of effective communications after some rookie errors during Governor Kazuo Ueda’s first months at the helm.
The task is complex: Remove much of the apparatus that has supported massive stimulus without scaring businesses and consumers into believing that a series of interest rate hikes is coming. Words will matter greatly. Not just what Ueda and his team say, but how they say it. Fortunately, the governor is starting to find his groove.
This isn’t the time for mixed narratives or academic meandering. Nor abrupt shifts in policy conveyed in the dead of night — midway through a two-day board meeting — by leaks to the Nikkei newspaper. The governor needs to get this right and there are promising signs he has come to appreciate this. Ueda is now framing the arguments for jettisoning the world’s last remaining negative interest rate, an experiment that came to epitomize the radical approach of his predecessor, Haruhiko Kuroda.